Updated twice daily M-F before 8:00 am CST and by 1 pm CST

• Today's official LME nickel closing prices - cash - $13.97/lb 3 month buyer - $14.24/lb (6% lower than 1/1/07)
• Baltic Dry Index - minus 230 to 10,656.
• LME nickel inventories - plus 96 tonnes into Rotterdam, Netherlands warehouse, minus 60 tonnes from Rotterdam warehouse
• We didn't expect much from LME traders today, but the nervous quiet that had settled over the exchange in anticipation of today's Fed announcement, finally broke in afternoon trading. Apparently gambling that the Fed would cut its prime rate by 25 points (1/4%), nickel prices gained. The Fed announcement will not be made until 2:15 pm EST, but there appears to be a general concensus in the media, that the Fed will cut the rate. It will be interesting to watch the LME reaction tomorrow if the Fed surprises the market, and leaves the rate alone. With headlines like Market Watch ran today "Dollar likely to drop no matter what Fed does" (here), today's metals trading isn't necessarily surprising. We added a purchasing alert below for any readers who may use, or purchase product using potash. For the day, three month nickel ended the day at $14.52 ($32,000/tonne)
• Dow Jones Closing Metals Report - more

  Standard Bank Commodities Research Weekly - pdf here

  Translated China articles

• The raw material bottleneck restriction, becomes the hot spot which the common people pays attention. The people pay attention are lack the nickel, the few chromium raw material, whether supports China to make great strides forward to the stainless steel powerful nation. " - more here  Chinese version here
• In yesterday's report, we have stressed that China is supporting 2007 global demand growth rate in the main role. In the table below, we summarize the data so far this year, China and other parts of China outside the growth rate of some key commodities. - more here  Chinese version here

  Copyright/courtesy Dow Jones - " Analysts said the option for stainless mills to use pig iron means nickel prices will likely be capped at between $38,000/ton and $40,000/ton. Currently, the differential between pig iron and refined metals allows stainless producers to turn back to nickel. "At current nickel metal prices, importing and processing the very low-grade laterite ore from the Philippines is most likely uneconomical, so if nickel prices do increase, the ability to use laterite ore will cap the upside above $38,000/ton," said Standard Bank's Westgate....But going forward, JP Morgan analyst Michael Jansen said producers would likely innovate to use nickel pig iron in higher grades of stainless steel if prices threatened to revisit the year's heady gains. "If nickel prices go back up to $40,000/ton, the stainless market will find a way to put low-nickel ore into high-grade stainless steel," he added."

  Courtesy/copyright www.okokok.com.cn (from China Stainless Steel Industry Report, 2007)

  Purchasing alert - If you use potash, or purchase product dependent on potash, you should be aware of what is happening in Russia. Apparently a large sinkhole has formed and if it keeps growing, it will consume a railroad line carrying 10% of the world's potash over it. Here is a photo and the aforementioned tracks - here  and story from Moscow Times yesterday - here

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.05/lb. Not much expected out of LME trading today, as all eyes are turned toward the US Federal Reserve meeting, which won't start until after London trading is closed. Meeting at 18:15 GMT. Trading should remain light and edgy.
• Bloomberg - more

  News Bites

• copyright KCI Publishing  - "European Confederation of Iron and Steel Industries (Eurofer) has filed the first two of four anti-dumping complaints with the European Commission. These primarily cover cold rolled stainless coil and HDG imports from China and stainless cold rolled flat products from South Korea and Taiwan. Two further complaints are likely to be filed for wire rod and plates."
• courtesy Steel Guru - "Mr Luo Bingsheng VC of the China Iron and Steel Association during the 7th China International Steel & Raw Materials Conference 2007 at Dalian recently said that that steel production in the first nine months was 360 million tonnes and would cross 480 million tonnes in 2007."
• courtesy Platts - "Ferro Alloys Corporation group which is into ferro alloys and alloy, special and stainless steel has announced a large expansion over the next for to five years, in view of the boom in the steel market. Mr.R.Saraf chairman and md of the group announced that it will spend around Rs 35 billion in putting up power plants and a 0.5 million green field stainless steel plant in Orisaa."
• "The National Multi-Commodity Exchange (NMCE) is launching new series for futures contract in aluminum, copper, lead, nickel, tin, zinc and raw jute, with effect from Thursday, November 1, 2007."
• courtesy Reuters - "Kazchrome, the world's third-largest ferro-chrome producer, is spending $111 million to build a new plant to produce 700,000 tonnes a year of chrome ore pellets, its parent company said on Tuesday. "The launch of the plant is planned for the second quarter of 2009," Eurasian Natural Resources Corp said in a statement."

  Yieh Corp October 2007 Special Edition - pdf here

  If All Projects Progress As Scheduled, Nickel May Become Over-Production In 2010 - more

  Indonesia's state-owned gold and nickel miner PT Antam said Wednesday it is joining forces with China's Tsingshan Holding Group Co. Ltd to build an integrated stainless steel facility in Indonesia. - more

  The global stainless steel market is still being hit by production cuts and slower demand for nickel, French metals group Eramet SA (13175.FR) said Wednesday. - (more)    French metals group Eramet SA (13175.FR) will see a drop in its 2008 nickel production of around 1,000 metric tons due to a technical incident at its ore enrichment plant in Tiebaghi, New Caledonia, it said Wednesday. - (more)

  China will import 410 million tons of primary iron ore next year, up 10.8 percent from this year, a senior industry official forecast at the 7th China International Steel & Raw Materials Conference 2007, held in Dalian today. - more

  Mining giant BHP Billiton is planning to ditch the confrontational iron ore annual benchmark pricing system and attempt to introduce index pricing based on an over-the-counter forward market. - more

  The world's three largest iron ore miners, Brazil-based Companhia Vale do Rio Doce (CVRD), and Australian-based BHP Billiton and Rio Tinto are committed to keeping pace with with China's increasing iron ore demand, officials from the companies told Interfax at the 7th China International Steel & Raw Materials Conference 2007, held in Dalian yesterday. - more

  Carpenter Technology Reports Record First Quarter Results - press release here

  Indonesia can attract as much as $11 billion in mining investments for 2008, if the mining bill becomes a law, said Priyo Abadi Soemarno, executive director of the Indonesia Mining Association. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 180 tons = 37,608 tonnes (2.28% - 858 tonnes cancelled warrants/ 36,750 net stock level)
•   Shanghai Jinchuan nickel - 272000-274000 RMB/t, no change

• Today's official LME nickel closing prices - cash - $14.02/lb 3 month buyer - $14.24/lb (5.52% lower than 1/1/07)
• Baltic Dry Index - minus 147 to 10,886.
• LME nickel inventories - plus 264 tonnes into Rotterdam, Netherlands warehouse, minus 168 tonnes from Rotterdam warehouse, minus 18 tonnes from Singapore, minus 24 tonnes from Helsingborg, Sweden warehouse, 18 tonnes in and 18 tonnes out of Busan, South Korea warehouse
• If you want to understand 'tense' these days, take a gander towards the Chinese steel industry. There are the negotiations with the world's biggest iron ore producers, with some analysts predicting the cost could easily double. Freight rates for raw materials that the nation is dependent upon are hitting levels simply unimaginable just a year ago. The raw material costs themselves are near record levels, or for those that have retreated off highs, are still well above levels they were at just a few short years ago. In the meantime, their government is demanding the industry become more energy efficient and much less polluting (when your government is Communist run, you tend to pay close attention to their requests). And now, Europe has taken a shot across their bow, filing two dumping complaints and seeking import tariff's on steel. US steelmakers, as well as other major steel producing countries, will be watching how this complaint turns out closely, as they consider similar action. And overshadowing all of this negative news? Record production, record demand, and record sales.
  Nickel started out southbound this morning from the opening bell, but by the end of trading, had crawled back to about where it started. Tomorrow could prove to be a turning point, as the US Federal Reserve announces a possible rate change. A lowering of the interest rate could easily stimulate the market, with no change signalling Fed confidence, and attracting a similar reaction. No change could also boost the dollar, which is generally negative toward base metals. Time will tell, but in the meantime, markets remain in neutral. For today, three month nickel ended trading at $14.29/lb  ($31,500/tonne)         
• Dow Jones Closing Metals Report - more

  Mick Davis, chief executive officer of Xstrata Plc, the world's fourth-largest nickel producer, said he is ``bullish'' on the outlook for stainless steel. - more (quote - ``At a certain level, deriving nickel from low-grade ores through this process yields an advantage, and below a certain price that advantage fades away. Some of our colleagues were in China and saw (nickel) ore on the wharves that had not been collected for processing due the relatively low nickel price at the time. There is a floor that is built into the nickel price for this kind of production, and that floor is around about $25,000 a ton to $28,000 a ton.'')

  Copyright/courtesy Bloomberg - There will be ``little or no increase'' in stainless-steel production in the fourth quarter, the Brussels-based Bureau of International Recycling said. Demand for stainless-steel scrap ``will quickly recover in the first quarter of 2008,'' Michael Wright, chairman of the BIR's stainless steel and special alloys committee, said today in an e-mailed statement. ``We are well past the bottom and are on the increase,'' Wright said. ``When the market comes back, we feel it will come back heavily for stainless-steel scrap.''

  News Bites

• courtesy The Age (yesterday) - "No sooner had Goldman Sachs JBWere issued it's morning report on Jubilee Mines than Full Disclosure's phone was running hot. The global broker put a 12-month price target on the nickel miner of $11.25 a share, and analyst Andrew Quail rated the stock a "sell" — although he had qualified it as "under bid review". The Goldman note put a couple of clients in a huff — hours earlier Swiss giant Xstrata had formally offered $23 a share in cash for the stock. "How can Goldman get it so wrong?" ranted one. "They're always undervaluing stocks."
• Courtesy Metal Bulletin - "Chilean molybdenum processor Molibdenos y Metales SA (Molymet) says the molybdenum price will stay at around the $30 per lb mark through 2009 due to the supply and demand factors in China, ceo John Graell told MB."
• Courtesy Rusmet - "Nippon Daido reduced prices for the domestic market for stainless rolled 304 class grade by about 8% ($ 613-875 per tonne) for October contracts in shipment in January...This is the second reduction in prices during the year. ...In August, has already announced a reduction of 10%. Prices of Ferritic stainless grade rent remain unchanged."

  Xstrata, the London-listed mining group, made inroads into the burgeoning market for nickel yesterday, announcing a deal to acquire Jubilee Mines, an Australian-based producer, for A$3.1 billion (£1.37 billion). - more (In the last two years, CVRD and Xstrata have both made aggressive moves in building up their nickel sectors, while BHP has seemingly been content with its 2004 purchase of WMC, and pegging its future on the opening of Ravensthorpe. It will be interesting to see if BHP makes a defensive counter-offer here, or CVRD values an Australian foothold as well.)

  BHP Billiton has broken with its iron ore rivals Rio Tinto and Brazil's CVRD, calling for the commodity to be traded in a more transparent market like that seen for thermal coal rather than in the "outdated" benchmark pricing system. - more

  The Chinese steel industry yesterday sent two strong messages to Australia's iron ore producers, as negotiators prepare to fix next year's ore price: steel production is moderating as exports are curbed, and there will be no concessions to acknowledge soaring shipping rates. - more

  Baoshan Iron & Steel Co., China's biggest maker of the metal, paced declines in Asian steel stocks after profit slumped because of higher raw-material costs and losses at its stainless-steel business. - more

  Shanxi Taigang Stainless Steel Co., China's biggest maker of the alloy, said profit rose 20 percent in the third quarter on increased production, and that it expects full-year profit to as much as double on higher prices. - more

  All four major Japanese steelmakers renewed record group sales in April-September, thanks to strong demand for automobiles and shipbuilding, according to earnings reports released by Tuesday. - more

  Japanese steelmakers Nippon Steel, Sumitomo Metal Industries and Kobe Steel said Tuesday they had expanded their scheme to share raw material supplies and production facilities. - more

  PNG’s biggest mining boom is gathering pace, with small, medium and large-scale mines being developed simultaneously in different parts of the country. - more

  (the soap opera continues) Splitting EnergoPolus off GMK Norilsk Nickel is generally viewed one of the key components to divide the business of Vladimir Potanin and Mikhail Prokhorov. - more

  Russia is making a macroeconomic breakthrough, and already by 2010 its economy will reach two trillion dollars, while by 2020 it will become the fifth biggest in the world, CEO of Deutsche Bank in Russia Charles Ryan said here on Monday. - more

  This is the badly beaten face of a construction worker boss, assaulted after he is said to have called an employee a "bastard and a baboon." - more

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

• Indications at 7:50 am CST show 3 month nickel selling  down by $.23/lb    We are suffering a major slowdown in internet access (slower than dial-up at moment) this morning and were seriously limited in our scope of coverage. Should be cleared up by our noon update.
• Bloomberg - more

  TD Bank Weekly Commodity Report - pdf here

  European Confederation of Iron and Steel Industries have filed the first two of four anti dumping complaints with the European Commission. - more

  It is reported that Indian Steel Alliance recently forecast that India would become a net importer of steel by the end of this financial year due to rupee depreciation and rising demand in the domestic market. Currently, India’s imports and exports of steel are almost at the same levels. - more

  Due to the stable nickel prices in October, Taiwan’s Yieh United Steel Corp (Yusco) and Tang Eng all raise prices for November. - more

  Courtesy Shanghai Nonferrous Metals SMM specialist Emily Xiang - "Price of nickel for three-month delivery found support at 31,000 usd per tonne. It was trading at 31,850 to 323,000 usd per tonne. As the demand of nickel on the last quarter will be better, and stockpiles of nickel on LME will continue to increase, it is forecasted that price will rally steadily. Shanghai nickel was consolidating at around 270,000 yuan last week. It tried to rise but failed as consumption is weak in the market. The price might rise to 280,000 yuan per tonne with rebound on LME."

  Courtesy AISI - "In the week ending October 27, 2007, domestic raw steel production was 2,088,000 net tons while the capability utilization rate was 87.5%. Production was 2,063,000 tons in the week ending October 27, 2006, while the capability utilization then was 86.2%. The current week production represents a 1.2% increase from the same period in the previous year. Production for the week ending October 27, 2007 is down 1.7 % from the previous week ending October 20, 2007 when production was 2,126,000 tons and the rate of capability utilization was 89.1%. Adjusted year-to-date production through October 27, 2007 was 87,878,000 tons, at a capability utilization rate of 85.9$. That is a 4.2% decrease from the 91,808,000 tons during the same period last year, when the capability utilization rate was 89.8$.

  News Bite - "The world's leading steel information service World Steel Dynamics, is expecting hot rolled steel prices to increase to $700 to $800 per ton through 2008, against an earlier estimate of $550 per ton this July."

  The latest edition of Nickel Magazine is now available online here

  Today's beginning nickel inventory

•   London Metal Exchange - plus 54 tons = 37,428 tonnes (2.15% - 804 tonnes cancelled warrants/ 36,624net stock level)
•   Shanghai Jinchuan nickel - 272000-274000 RMB/t, minus 1000

• Today's official LME nickel closing prices - cash - $14.14/lb 3 month buyer - $14.31/lb (5.52% lower than 1/1/07)
• Baltic Dry Index - plus 8 to 11,033.
• LME nickel inventories - plus 158 tonnes into Rotterdam, Netherlands warehouse, minus 125 tonnes from Rotterdam warehouse
• Expect a volatile first few days of this week, with the all important FOMC meeting on Wednesday drawing the major attention. Even the major news that Xstrata had made a $3.1 billion dollar offer for Australian miner Jubilee Mines didn't draw the bullish reaction takeover news usually does. Tomorrow's talk will be probably about whether BHP or CVRD might trump Xstrata's offer. Market did take an early morning bounce, but by late morning had fallen into the red, where it spent the rest of the day. For the beginning of the last few days of October, three month nickel ended the day at $14.31/lb ($31,550/tonne)
• Dow Jones Closing Metals Report - more

  South Korea's Public Procurement Service, a state-run body that manages commodity stockpiles, is seeking to buy 200 metric tons of refined nickel at a tender. - more

  Outokumpu press release - "Among some other Finnish companies, Outokumpu’s Tornio Works was affected last week by the Salaried Employees Union strike. The strike started on October 22 and ended on October 26. During the strike most of the stainless steel production operations in Tornio were suspended. Deliveries, however, continued from existing stock. Production was ramped back up during the weekend, and the mill is now capable to meet all orders. Due to the short duration of the strike, direct effects to the Group’s results were marginal."

  North American Steel Price Forecast - Flat Products - here

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.09/lb Market started out in the green, but has fallen into the red in afternoon trading. Expect a nervous market for the first part of this week, as all eyes will be on the FOMC meeting on Wednesday.
• Bloomberg - more
• Reuters - more
• AFX - more

  Haywood Securities - Metals & Mining Weekly - pdf here

   Weekly Forecast by China Shanghai Metal analysts - Of 31 responding, 22 (70%) felt the price of nickel would rise this week, while the remaining 9 (30%) felt the price would stay steady. None felt the price would fall.

  Interfax China reported that major Chinese stainless steel mills will raise prices for core products by CNY 500 (USD 67) per tonne in November from the October price level in response to recent rises in nickel prices. - more

  Recently Chinese stainless steel market is generally stable, however stockists are still adopting a wait-and-see approach. - more

  All stainless steel mills experienced profit shrinks due to the dramatic nickel price fall since May this year. - more

  Julian Hanna, managing director of Western Areas NL, may have known something when he told the Australian Nickel Conference last week that a major challenge for the new wave Western Australian nickel producers would be to retain independence. - more

  Type 304 stainless steel has been the star of foodservice equipment manufacturing for a long time. Now, with skyrocketing prices forcing manufacturers to seek alternate grades, you'll be facing new choices when spec'ing your kitchens. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 42 tons = 37,374 tonnes (2.39% - 894 tonnes cancelled warrants/ 36,480 net stock level)
•   Shanghai Jinchuan nickel - 273000-275000 RMB/t, plus 3500

  Xstrata makes $3.1 billion takeover offer for Australia's nickel miner Allegiance Mining....Jubilee mines around 12,000 tonnes of nickel a year from its Cosmos nickel project - more

  Scotiabank Commodity Price Index - pdf report here

  Courtesy Steel Guru - "According to the latest figures from China customs department that China’s net imports of refined nickel and nickel alloy were 6,414 tonnes in September 2007. The department said that was very much in the recent range of 5,000 tonnes to 7,000 tonnes per month since April. Outright imports at just under 7,000 tonnes in September were a little softer than the previous couple of months but that was offset by a decline in exports to just 530 tonnes the lowest level since the first quarter of 2005."

  Courtesy BNP Paribas Monthly - "Demand recovery from stainless steel mills, speculative money and a weaker dollar appear to be the only factors that explain why nickel is still above US$30,000 tonne. Even though they have corrected from the US$55,000/tonne level, prices are still well above production costs of less than US$10,000/tonne. Fundamental data appears to be generally bearish.....Besides, LME inventories have kept increasing, reaching 37,470 tonnes on October 25th – a 15% rise since September 28th. They have now risen eight-fold since mid May. Moreover, even if stainless steel demand is picking up, it is worth noting stainless steel scrap is available in large quantities and can provide a cheap substitute for nickel metal. In light of all these factors, we expect nickel to fall back below US$30,000/tonne in the near future." - report here

  Anecdotal evidence from miners is that they can pretty well sell their nickel anywhere but the analysts are getting gloomy about the metal's price outlook. - more

  If you are having a hard time understanding what nickel is doing, look at what one LME trader told Russia's MetalTorq on Friday - (from translation) "I am no longer thinking of the price of LME. I do not try to analyze because the nightmare continues. It is impossible to calculate, and it is impossible to understand, "confessed Trader."

  Spanish stainless steel producer Acerinox has announced it has no plans to change its method of calculating its surcharge, as have other producers of stainless steel in the EU, including Outokumpu.

  Steel producers of the European Union (EU) are threatening to file anti-dumping complaints to the European Commission next week against rising imports from China, media reports said on Friday. - more

  Universal Stainless Alloy Products, Inc. reported today that sales for the third quarter of 2007 rose 13 percent to $62 million compared with $55.1 million in the third quarter of 2006. - more

  Rio de Janeiro-based CVRD has pushed back the development of its Vermelho nickel project in Brazil due to difficulty in securing environmental licenses, CVRD CFO Fábio Barbosa said on Friday. - more

  BAOSTEEL, China's biggest steelmaker, says iron ore supplies are lagging behind demand from the country's mills, indicating it may struggle to hold down prices in talks with mining companies led by BHP Billiton. - more

  Russia’s emergence as a major minerals player, emissions trading and a surge in nickel exploration and production have been forecast as important to the future of the Goldfields economy. - more

  National Mining Association Mining Week - pdf here

  Despite lower nickel revenue during the third quarter, CVRD, the world's No 2 miner, has earned $10bn in the first nine months of the year, 77% up on the comparable 2006 period. - more

  The provincial elected officials could not meet without evoking the coldly announced concretization all of the factory of North. - translated article here

  China’s crude steel output September is reported at 42.71 million tonnes up by 17.5% YoY. - more

  PBS Frontline - watch episodes online - here

• Today's official LME nickel closing prices - cash - $14.27/lb 3 month buyer - $14.42/lb (4.71% lower than 1/1/07)
• Baltic Dry Index - plus 31 to 11,025. (first time ever over 11M mark)
• LME nickel inventories - plus 72 tonnes into Rotterdam, Netherlands warehouse, minus 168 tonnes from Rotterdam warehouse, minus 102 tonnes from Busan, South Korea warehouse
• Finally, a slow news day. Traditionally, analysts like to play the whole "us against them" card as stainless steel producers against the nickel miners. And while in years past that may have been true, the reality of today's market has shifted the paradigm to stainless steel producers against LME traders. Every time buyers make a purchase, the traders think that demand is recovering, and raise the price of nickel. This draws an inevitable reaction and demand dries back up, or buyers goes stealth. A couple of things are fairly certain right now. Buyers are only buying what they need and traders are betting they are going to need a whole lot more soon. Eventually, one side of the other will have to blink. We are seeing many reports out of China that buyers are refusing to accept current market prices. On the other hand, they have been refusing these prices for a very long time now, and when buyers come shopping and distributors make the decision to re-stock, the producers have no nickel stockpiles to fall back on, and they will have to pay whatever price is offered. Other news indicates producers are starting to fire back up, at least in Asian markets. While inventories have risen in LME warehouses, and now are higher than they were at anytime last year, everyone realizes they could drop as easily as they have risen. There is currently a lot of tension building in the market, as both sides play cat and mouse with the other. The problem with tension is it inevitably snaps at some point, and this is usually followed with bad news for one of the parties. Nickel started off very strong this morning, but the enthusiasm faded and prices stair-stepped back down until late trading, when they climbed back up a little. Three month nickel ended the day and week at $14.42/lb ($31,800/tonne)  After losing ground on Monday and Wednesday, the trading price of nickel was unable to return to last Friday's close and for the week, ended down by 1.3%
• Dow Jones Closing Metals Report - more
• Here is a short video that should amaze you - here and another to impress you pool sharks here  Have a great weekend!!

  Courtesy/copyright October Citigroup Report "Commodity Heap"

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.10/lb.   Price of nickel jumped straight up this morning at the bell, rising by nearly $850/tonne, on news that nickel inventories had actually fallen. Traders must have thought Christmas had come early and assumed the stainless drought was finally over, until someone reminded them that when considering cancelled warrants, the net inventory actually grew. And that the "net" LME inventory level is higher than it was at anytime last year. Doh! Prices have been on a stair-step slide since.  
• Bloomberg - more
• Thompson Financial - more

  Copyright/courtesy Dow Jones - "LME nickel is looking technically strong, says Will Adams of BaseMetals, adding it is range bound between $31,000/ton and $33,000/ton. If nickel breaks above $33,550/ton then the metal could rise higher, but then "prices would be running ahead of fundamentals" as physical traders say there hasn't been any real sign of a pickup in stainless steel production. "

  Germany’s stainless steel production this year is expected to drop by 20 percent in the same comparison to around 1.4 million tons, according to estimate by the ERG-Edelstahl Recycling GmbH. - more

  The Indonesian unit of Inco Ltd said on Friday its nickel in matte output rose 15.3 percent in the first nine months of the year, helped by a increase in power supplies at its mining area in Sulawesi. - more

  China’s booming economy continues to draw in raw materials of all kinds, with few signs of let-up in the key steel, copper or aluminium industries, customs data showed on Thursday. - more

  The negotiations with steel mills in Japan on price of low carbon ferro-chrome for shipments in October - December quarter of 2007 have been settled by a rise of 20 US-Cents per lb. in comparison with that fixed for the preceding quarter of July - September and the new price has come to 185 US-Cents per lb. CIF Japan for carbon 0.1% max. material. - more

  Jindal Stainless Ltd., India's biggest maker of the alloy, said second-quarter profit more than halved as sales fell and raw material costs climbed. - more

  LOCALS for Esperance Development (LED) group have sought assurances from nickel companies and Department of Environment and Conservation (DEC) that there will be zero nickel dust emissions from the Esperance Port Authority (EPA) and along the transport corridor. - more

  Courtesy STT - "The Union of Salaried Employees (TU) and the Finnish Technology Industries on Friday accepted a settlement proposal submitted earlier the same day by Juhani Salonius, the national conciliator. About 3,000 managerial and clerical workers at six large engineering, smelting and steel companies had been on strike since Monday."

  Australian coal miners are being given lessons in foreplay and the menopause in an attempt to boost productivity. - more

  Today's beginning nickel inventory

•   London Metal Exchange - minus 138 tons = 37,332 tonnes (2.17% - 1146 tonnes cancelled warrants/ 36,552 net stock level)
•   Shanghai Jinchuan nickel - 269000-272000 RMB/t, plus 2500

• Today's official LME nickel closing prices - cash - $14.06/lb 3 month buyer - $14.29/lb (5.67% lower than 1/1/07)
• Baltic Dry Index - plus 10 to 10,994.
• LME nickel inventories - movement shifted back to Europe. plus 450 tonnes into Rotterdam, Netherlands warehouse, minus 252 tonnes from Rotterdam warehouse, minus 12 tonnes from Liverpool, Great Britain warehouse. Cancelled warrants slip 1/2%.
• China was the big story of the day - again. With a GDP running at 11-1/2%, and news from Reuters that stainless steel producers have left their stores of refined nickel run dry (see first story below), nickel bounced today. The US new housing report was disappointing, but not overly alarming. Most traders are betting on a rate cut by the US Fed next week, so as that meeting nears, expect further volatility as traders play cat and mouse. Base metals were green across the board, with nickel gains taking a momentary pause before the US report was made public, then returning to nearly match its early morning trading peak. US consumer confidence is out tomorrow, which may or may not have an effect on trading psyche in the US, but should not have any bearing on London metals trading. Did the fundamentals change today? No. But the news from Asia was definitely in the bulls favor. Inventories of nickel in LME warehouses are now greater than they were at anytime last year. Three month nickel ended the day at $14.33/lb ($31,600/tonne)       
• Dow Jones Closing Metals Report - more

  China faces a shortage of spot refined nickel due to fewer imports and stronger demand from stainless steel mills, traders said on Thursday. - more

  Service center inventories of steel and aluminum products continued their year-over-year decline in August, and shipments of both metals also fell during the month from 2006 levels, according to the latest Metals Activity Report from the Metals Service Center Institute, Rolling Meadows, Ill. - more

  Major Chinese stainless steel mills will raise prices for core products by RMB 500 ($66.76) per tonne in November from the October price level in response to recent rises in nickel prices. - more

  Russia is becoming a major customer of Australian nickel exports - more (Russia buying nickel ore from Australia to ship to Finland - go figure!)

  Copyright/courtesy Reuters - ""In nickel, there is a clear case of demand destruction -- we're seeing that in reports from steel makers," Corrigan (Sean Corrigan at Swiss-based fund Diapason Commodities Management) said. And there is nickel mine supply coming on stream. "I would have thought that the recent rise in nickel prices was not really fundamentally supported, with physical demand still relatively soft, so I see potential for a correction," Michael Widmer, metals analyst at Calyon, said. Analysts worry there could be further fallout for base metals as a sector from the crisis in global credit markets."  

  Courtesy Platts - "With "not a great deal of fundamental news out over the last few days", base metals players are looking everywhere for clues as to movement, according to a trader with a London Metal Exchange ring dealing member."

  Strong demand of more than 4 percent a year and stagnant supplies will boost prices of molybdenum, prized for its ability to harden stainless steel. - more

  From China media - "During the first 9 months of this year, Taigang Stainless production of cold-rolled stainless steel rose 79.27%, cold plate output grew 37.47%." "Stainless steel company Nippon Steel (NSSC) officials have said the company will resume full production next week at its Hikari factory." "European Commission Secretary General Dzurek told by Chinese State Development and Reform Commission that China wants to reduce iron and steel production capacity by 20%. China is very nervous about EU anti-dumping tariff's. Article does not make clear if this statement is a general remark, or specific to exports to the EU."

  A huge steel plant which is Beijing's worst polluter has pledged to drastically cut production next summer so that the 2008 Olympic Games can enjoy better air quality. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.23/lb . Market is trading off earlier high's, with markets watching for reaction to US new housing starts report due out later this morning. Yesterday's markets fell on dismal house sales, but by afternoon the Dow had recovered nearly all of its losses on the day on rumors floating around the Fed would cut interest rates a week earlier. While we feel this is a huge stretch even for a rumor, the market bought it and reacted positively. The rumor also drove the dollar lower, which in turn added positive sentiment to metals, which got an additional boost this morning by fresh economic reports out of China showing that country has yet to slow down its blistering growth. Lot of news this morning - so pick what interests you.
• Bloomberg - more

  Standard Bank - Commodities Research Weekly - pdf here

  New nickel projects will inject a further 275,000 tonnes of the metal into global markets by 2013, but supply-demand dynamics are expected to remain tight despite the additional volumes, according to a commodities researcher. - more

  News Bites - "China's industrial output up 18.9 pct y-o-y in September" "China's GDP up 11.5% in first nine months"  "With shipping freight rates and local railway charges rising sharply last month, Indian iron ore prices (high grade) in the spot market have hit a record high of $175 a tonne." "China's output of medium and heavy plate rose by 40 percent year-on-year in the first nine months of 2007, according to the latest figures from China's Statistics Bureau." "Major Chinese stainless steel mills will raise prices for core products by RMB 500 ($66.76) per ton in November from the October price level in response to recent rises in nickel prices" "China produced a total 362.73 million tons of crude steel during the first nine months of 2007, up 17.6 percent from the same period last year, with September production alone reaching 42.71 million tons, up 2.72 percent from August, according to statistics released today by the China Iron and Steel Association (CISA)." "Stainless steel sales within Brazil are expected to grow some 10% this year versus 2006 to 220,000t, local news agency AE-Setorial reported based on data from industry association Núcleo Inox."

  SMM Weekly Review and Forecast - "Shanghai nickel spot goods holders wanted to follow the rallying trend of nickel on LME, but domestic consumers would like to wait and did not want to buy at high price. It was difficult to keep steady because of wide consolidation on LME."

  China's exports and imports of refined lead, zinc, tin and nickel as well as concentrates in September and the first nine months of 2007, as reported in official customs figures. - more

  Samancor Chrome Ltd., which produces about a fifth of the world's ferrochrome, said it's pushing customers to pay more for supplies, while most of its peers have agreed to keep prices at a record high for the fourth quarter. - more

  According to a recent International Nickel Study Group announcement China's demand for nickel and nickel containing products is set to boost global primary nickel consumption by 8.9% to 1.47 million tonnes next year from 1.35 million tonnes this year. - more

  First production mining is underway in west Tasmania at Allegiance Mining’s Avebury underground mine, which is expected to produce the world’s highest-grade nickel concentrate. - more

  Indian Jindal Stainless plans to spend 100 million dollars for the construction of the steel plant in the northwest of Russia capacity of 400,000 tons of stainless steel a year, told Reuters Representative Jindal in Russia Mahendra Agarwal. Construction of the plant to the west of St. Petersburg will take a year from the date of approval of the project, which is expected in the next two weeks, said Agarwal.

  Courtesy ferrosilicon.net - "Notice from NDRC, MOF and SERC, local government must carry out the policy about preferential power tariff rate on classified enterprises, like ferroalloy and electrolyte aluminium producer. Before Oct 20, 2007, those preferential rate must be cancelled."

  While the Government of South Africa has already suggested the South African companies concerned to enforce the regulations for exports of chrome ore, the matter to impose export duty is supposed to be under consideration. A promising duty is thought to be US$50 per ton. - more

  The biggest problem facing nickel ore exporters from the Philippines is freight costs to China, the chief executive of Toledo Mining Corp. PLC told Dow Jones Newswires. - more

  With 2008 iron ore contract price talks set to begin next month, analysts have been rushing to revise their price forecasts upward. Projected increases are generally in the neighborhood of 25%, but some are postulating hikes of as much as 50%, and one steel analyst suggested to Platts this week that prices could conceivably double. - more

  Acerinox SA said it posted net profits in the nine months to September 30 of 424.3 mln eur, up 56.4 pct from 271.3 mln a year earlier. - more

  JFE Holdings Inc., the world's third- largest steelmaker, reported a 10 percent decline in second- quarter profit as freight charges doubled and costs increased for nickel, iron ore and manganese. - more

  BIR Stainless Steel World Mirror October - Michael Wright, ELG Haniel Metals Ltd, United Kingdom, Chairman of the Stainless Steel & Special Alloys Committee - "At the time of our previous Stainless Steel Mirror published in March 2007, we still anticipated global stainless steel production of over 31 million tonnes for this year, but warned of risks relating to the high nickel price of over US$ 50,000 per tonne and the effects this could have on substitution of austenitic grades by lower-valued material. We mentioned that experience had told us that a decline in the nick- el price would see stainless steel users and service centres quickly stop new orders, and also delay or even cancel existing orders. The dramatic fall in nickel prices experienced during the second quarter triggered this exact scenario. We now expect 2007 production to total no more than 28.6 million tonnes, which is almost the same as in 2006."

  A European Union official said Wednesday he received assurances from China that it is trying to curb steel production, an announcement that could ease tensions between the two sides over soaring Chinese exports. - more

  October 2007 report - Bolt, Nut, Screw, Rivet, and Washer Manufacturing Industry in the U.S. and its Foreign Trade (1997-2009) - Abstract - "The industry's revenue for the year 2006 was approximately $9 billion US dollars. The gross profit was around 30%. Market sizes for the bolt, nut, screw, rivet, and washer manufacturing industry are: aircraft fasteners, except plastics (including aerospace) (18.3%); externally threaded metal fasteners (except aircraft types) (41.6%); internally threaded metal fasteners (except aircraft types) (10.6%); nonthreaded metal fasteners (except aircraft types) (13%); products (except fasteners), cold/warm/hot-heading processes (8.5%); and bolt, nut, screw, rivet, and washer manufacturing, not specified by kind, total (8%). Import was valued at $3.68 billion US dollars from 86 countries. The industry also exported $2.44 billion US dollars worth of merchandises to 157 countries."

  SteelBenchmarker reported that the US hot rolled band spot price for October 22nd 2007 dropped by 0.5% to USD 577 per metric tonne, FOB the mill after 4 consecutive rises, The World export HRB price dropped by 0.3% to USD 585 per tonne FOB the port of export for the fourth consecutive time. - more

  The Development of China Fastener Industry (Part 5) - here

  Today's beginning nickel inventory

•   London Metal Exchange - plus 162 tons = 37,470 tonnes (2.69% - 1008 tonnes cancelled warrants/ 36,462 net stock level)
•   Shanghai Jinchuan nickel - 267000-269000 RMB/t, minus 7000

• Today's official LME nickel closing prices - cash - $14.13/lb 3 month buyer - $14.24/lb (6.04% lower than 1/1/07)
• Baltic Dry Index - plus 40 to 10,984.
• LME nickel inventories - plus 60 tonnes into Rotterdam, Netherlands warehouse, minus 54 tonnes from Rotterdam warehouse, plus 96 tonnes into Singapore warehouse
• While nickel inventories into LME warehouses grew overnight, the net level is still lower than it was on Monday as cancelled warrants remained in the 3% range. The last few days have seen an unusual shift in inventory growth from Europe to Asia, with Rotterdam receiving smaller shipments, and Singapore and Busan receiving larger shipments. Nickel traders bet on a dismal housing report in the US today, and weren't disappointed. Prices slumped from the beginning of the trading session, leveled off, and then slumped further after the report was made public. The new housing report is out tomorrow, but many traders have probably already traded this news in, figuring it will be dismal, so the price of nickel may rebound a little tomorrow. For the day, three month nickel ended the day at $13.97/lb ($30,800/tonne)    
• Dow Jones Closing Metals Report - more

  Stainless demand has not yet returned, according to market reviews by several analysts who had expected purchasing and pricing to rebound this month or next. - more

  Poor economic data from the United States suggesting weaker demand for industrial metals, sank copper prices to near a one-month low, traders and analysts said on Wednesday. - more

  Southern California Fire Updates - Google Map here  Live TV coverage here 1750 homes and 100 businesses damaged or destroyed  in San Diego County alone (reported by San Diego Union-Tribune 18 hours ago) - over 950,000 people evacuated thru this morning

  from select Chinese Media

• Chinese media reports Japan sources advise they have sold 70 tons of nickel cathode in the past two weeks, 20 tons destined for South Korea and the remaining 50 tons to Southeast Asia. Believed to be destined for stainless steel producers as manufacturing buying, including battery producers, has been very soft.
• Pipeline growth in US is booming and expected to continue. Other uses that will add support to above average molybdenum prices for many years include worldwide oil and gas projects, increased production of diesel-driven vehicles, and the continued growth in the nuclear power industry.
• China Steel Industry Association statistics - Chinese stainless steel production reached 3.5 million tons, an increase of 54% over the same period, imports of 956,500 tons of stainless steel, a 25.45% year-on-year decline, stainless steel export 833,800 tons, an increase over the previous year of 224.44%
• Baosteel ferritic stainless steel production currently accounts for 50% of the total output to reduce risk of high nickel prices. Baoshan Iron and Steel Research Service officials said the company currently has 100,000 tons of stainless steel production capacity dependent on the use of nickel pig iron. The three major steel mills in China, Baosteel, TISCO and Zhangjiagang Pohang, since the beginning of 2007, have replaced monthly consumption of 2,000 tons of refined nickel with total monthly consumption of 50,000 tons of pig iron nickel.
• courtesy RongPhui(HK) Enterprise Limited - "Although China has enjoyed rapid economic growth this year, its growth in steel product apparent consumption has been slowing down since 2004. In 2003, growth in apparent consumption stood at 25.75%. This fell to 11% in 2006 and 10% in the first eight months of this year."

  Sources in European trade departments have confirmed that the European Industrial Fasteners Institute (EIFI) has lodged an antidumping complaint with the European Commission targeted specifically at carbon steel fastener imports from China. The complaint covers a wider range of iron and steel fasteners, other than stainless steel on which antidumping tariffs already exist, ... more

  The Development of China Fastener Industry (Part 4) - here  Parts 1 thru 3 posted October 19 here

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.16/lb . One of those nervous days for traders as US releases existing home sales report in about an hour. Expected to be yet another reflection of a housing market in downturn since the sub-prime debacle became concern #1, traders are leery what psychological implication the news will carry, and how other traders will react. Many traders are quietly waiting and watching. We don't expect much movement today, with another key report, new home sales, out tomorrow. 
• Bloomberg - more

  The global stainless steel market is expected to pick up in the first quarter of 2008 after heavy production cutbacks, which encouraged more scrap sales to Asia, a recycling conference heard this week. - more

  With one week left to October, we estimate the 300 series stainless surcharges for US stainless steel producers in December, which will be officially determined at the beginning of November, will increase over the November surcharge by about 3%. Subject to market price movement during remainder of October.

  South Korean Posco is considering to produce 200 series stainless steel, according to the company. Currently South Korean imports around 5,000 to 10,000 tons of 200 series stainless steel products per month. - more

  North American Stainless has announced to raise the price of stainless steel cold rolled products by US$5 cent/lb (US$100/ton) since 15 October. - more

  Allegheny Technologies Incorporated reported net income for the third quarter 2007 of $193.9 million, or $1.88 per share, on sales of $1.33 billion. - more

  Australia's Allegiance Mining NL, which is backed by China's largest nickel group, Jinchuan, said it was on track to start nickel production from a new mine in the first quarter of 2008, driving up its stock. - more

  Graph from Recycling International October 2007 - pdf here

(Note the comments)

  Chinese output of nickel pig iron, a cheap substitute for nickel used in stainless steel, will stall in 2008 as prices fall, according to Toledo Mining Corp., which supplies ore to make the product. - more

  The peak of May seems to be digested. The price of the nickel, which had dropped of almost half, has just found its course of January 2007. - translated article here

  Russian aluminum giant United Company Rusal has offered to buy Mikhail Prokhorov out of Norilsk Nickel, business daily Vedomosti reported Wednesday. - more

  US September Monthly Steel Imports Fact Sheet - pdf here

  Police officers have been sent to the remote [Chinese-backed] Ramu nickel mining site to investigate the allegations of an influx of illegal foreigners. - more

  The head of one of Australia’s new wave nickel producers warned today that the country’s industry needs to ensure its nickel mines don’t get absorbed like most of the major gold mines by foreign owners. - more

  Strong economic growth will support the world's steel industry over the next year but a shortage of raw materials and high prices are putting pressure on margins, the head of the German Steel Federation believes. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 102 tons = 37,308 tonnes (3.26% - 1218 tonnes cancelled warrants/ 36,090 net stock level)
•   Shanghai Jinchuan nickel - 274500-275500 RMB/t,  minus 1500

• Today's official LME nickel closing prices - cash - $14.38/lb 3 month buyer - $14.56/lb (3.7% lower than 1/1/07)
• Baltic Dry Index - plus 91 to 10,944.
• LME nickel inventories - plus 60 tonnes into Rotterdam, Netherlands warehouse, minus 66 tonnes from Rotterdam warehouse, plus 144 tonnes into Busan, South Korea warehouse. While day shows another gain, when taking cancelled warrants into consideration, net inventory actually dropped today.
• Nickel started off on the plus side this morning, but by afternoon, traders lost their enthusiasm and backed off. US housing reports are due out tomorrow and Thursday, and while they may mean little to base metals demand, they are likely to have a psychological effect on market trading, which in turn, could effect metals market sentiment. Three month nickel ended the day at $14.40/lb (same as yesterday) ($31,750/tonne)
• Dow Jones Closing Metals Report - more

  Chinese media reports imports of low grade laterite ore from the Philippines declined by 45.4% during September compared to last year. Low grade laterite is used in the production of the so-called pig-nickel.  

  Chinese media reports YUSCO of Taiwan will raise prices on stainless steel by around $200/tonne in November.  

  Copyright/courtesy Dow Jones - "The outlook for nickel remains subdued and rallies are unlikely to be sustained, says UBS analyst Robin Bhar. Adds stainless steel production growth will slow sharply in the second half of '07 as consumers run down stocks rather than place new orders, citing the International Stainless Steel Forum."  and  "Nickel on-warrant stocks declined a hefty 258 metric tons, with canceled warrants spiking 396 tons in data Tuesday, which suggests that the physical market is waking after a summer hibernation, says JP Morgan analyst Michael Jansen. This was a result of aggressive de-stocking of stainless steel by consumers and in turn, mills who saw demand slump due to high nickel and thus stainless steel prices, as well as substitution, he says. Still with stocks at multiyear highs, and no sign of tightness in the front month spreads, "the preconditions for a sustained nickel flat price rally are sorely missing," he says.

  Outokumpu expects demand for its stainless steel to improve during the fourth quarter but overall deliveries to still be short of normal seasonal levels, chief executive Juha Rantanen said. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.16/lb . Numerous quarterly reports out today. BHP reports its nickel output dropped 19% from the previous quarter due to maintenance shutdowns at two of its operations, down 13% from last year. Sally Malay told Mineweb it has set 20,000 tonnes of nickel as its production goal next year, up from 12,000 tonnes this year. Dollar is drifting lower this morning, which is adding fuel to base metals buying.  
• Bloomberg - more
• Reuters - more
• AFX - more

  Copyright/courtesy Dow Jones - "If LME nickel successfully tests the $32,000 a metric ton level Tuesday, there is potential for another test higher of $33,000/ton, says Triland Metals. Adds that further gains are subject to what the physical hedgers "deem the correct level to unwind for some profits."

  Copyright/courtesy Dow Jones - "Outokumpu has encountered problems with some distributors that the company said often delayed orders so that they could speculate on the price of nickel, a key ingredient in value-added stainless steel products.  In order to counter this, Outokumpu last month launched a restructuring program to cut out distributors by boosting sales of finished products directly to end-customers."

  Behre Dolbear Global Mining News - pdf here

  EDC Commodity Price Update - pdf here

  TD Bank Weekly Commodity Price Report - pdf here

  Presentation to Steel Logistics Conference September 24-26 2007Overview and outlook of global steel production - pdf here

  This Week’s Raw Steel Production - here

  Finland's leading metals group, Outokumpu Oyj, reported a third-quarter net loss of €214 million (US$303 million), mainly because of lower nickel prices. - more  press release here

  Stainless-steel inventories held by members of the Japan Stainless Steel Coil Center Association rose 2.3 percent in September from August, the industry group said. - more

  Universal Stainless & Alloy Products, Inc. reported today that sales for the third quarter of 2007 rose 13% to $62.0 million compared with $55.1 million in the third quarter of 2006. - more press release here

  AK Steel today reported net income of $108.4 million, or $0.97 per diluted share of common stock, for the third quarter of 2007, compared to net income of $26.0 million, or $0.23 per diluted share, for the third quarter of 2006. - more

  The data showed that US exported 39,300 tons stainless steel in August, up by 17 percent year-on-year, but in 9 percent drop compared to July this year. - more

  BHP Billiton, the world`s biggest mining company, reported production growth that missed some analysts` forecasts, a sign capacity constraints and maintenance requirements will make it harder to meet surging demand from China. - more  press release here

  Platts steel editorial director, Francis Browne, talks to Platts.com web content director, Michelle Hart, about the topics discussed at the International Iron & Steel Institute annual conference this month, including China; climate change; and skillsets for the future. - audio here

  The Philippines' Berong Nickel Corp is looking at buying an integrated steel plant in China's Guangxi province to produce nickel pig iron and stainless steel within one of its main markets. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 138 tons = 37,206 tonnes (3.26% - 1212 tonnes cancelled warrants/ 35,994 net stock level)
•   Shanghai Jinchuan nickel - 275000-278000 RMB/t, minus 3500

  Daily Nickel/Stainless Roundup

• Today's official LME nickel closing prices - cash - $14.11/lb 3 month buyer - $14.27/lb (5.8% lower than 1/1/07)
• Baltic Dry Index - plus 55 to 10,853.
• LME nickel inventories - plus 612 tonnes into Rotterdam, Netherlands warehouse, minus 84 tonnes from Rotterdam warehouse, minus 48 tonnes from Liverpool, Great Britain warehouse, and plus 66 tonnes into Chicago, US warehouse.
• Markets started out the week in a sour mood as the housing credit crunch reared its ugly head again Friday. Markets worldwide were in the red today (see here) The U.S. stock markets could be choppy throughout this week, with US existing home sales and new home sales reports due out later in the week. Some analysts would like everyone to believe the worst is behind us, but we seriously doubt that. There are way too many adjustable rate mortgages due to increase over the next few years for this credit problem to be dismissed. How that may or may not affect metals, is another question. The world economy is healthy, and is far less dependent on the US market as it once was. Not everyone agrees with that, and we posted an article from miningmx today that says commodities are still very dependent on the US economy. The dollar fell to an all time low against the Euro in Asian trading, but rose later in European and American trading. A falling dollar usually supports higher metals prices, but as we stated earlier, traders were in a sour mood from the first bell. Nickel inventories took another big jump up, gaining 543 tonnes overnight. This added negative sentiment, as LME stored levels went over the 37,000 tonne mark for the first time since February 3rd, 2006, when nickel inventories topped out for 2006 at 37,218 tonnes.  For the first day of the trading week, three month nickel ended at $14.40/lb ($31,750/tonne)      
• Dow Jones Closing Metals Report - more

  Haywood Securities Metals & Mining Weekly - pdf here

  Outokumpu to change the alloy surcharge calculation method for stainless steel starting with deliveries for January 2008 - more

  Toledo Mining's decision on pig iron production in China hinges on whether it is the most cost effective way to use the miner's substantial laterite ore deposits, company Chief Executive George Bujtor told Dow Jones Newswires Monday. - more

  Commodity shares are responsible for the JSE being so strong. And the question now being asked is whether that trend can continue, given the marked slowing in economic growth in the United States. - more

  World Economic Outlook Globalization and Inequality October 2007 - report here

  Teaser from Wall Street Journal article - " The cost of shipping raw materials across the world's oceans has reached an all-time high, pushing up prices of grain, iron ore, coal and other commodities. The average price of renting a ship to carry raw materials from Brazil to China has nearly tripled to $180,000 a day from $65,000 a year ago. In some cases, ocean shipping can be more expensive than the cargo itself. Iron ore, for example, costs about $60 a ton, but ship owners typically are charging about $88 a ton to transport it from Brazil to Asia."

  European finance ministers this weekend failed in their bid to slap down the United States for allowing the dollar to plunge to record lows against the euro. - more

(taken from Xstrata Nickel Koniambo Presentation pdf here)

  Industrial metals fell sharply at the London Metal Exchange on Monday as asset prices across markets dropped on concerns that problems in housing and credit were spreading to the broader economy, analysts said. - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.32/lb . Indicators also show all base metals traded on the LME are lower in mid afternoon trading.
• Bloomberg - more
• CNN - more
• Reuters - more

  Courtesy/copyright Dow Jones - "LME nickel is under pressure as news of cuts in stainless steel requirements continue to filter through market, says Societe Generale's Stephen Briggs. A "sizeable surplus" is now expected for the market in '07-'08, he notes, even though nickel projects seem "peculiarly prone to cost escalation and delays."

  Metal prices will probably have to take it on the chin when London trading opens tonight. - more

  In a weekly survey of Chinese metal analysts, the majority of those responding felt the price of nickel would fall this week. 19 (57%) felt the price of nickel would fall, while 8 (24%)  predicted the price would stay the same, and the remaining 6 (18%) forecast the price would rise.

  Iron Ore News

• Unofficial iron ore price negotiations have kicked off in Tokyo with analysts predicting a hike of up to 50 per cent. - more  
• Iron ore and coal prices are taking another massive leap as Chinese, Indian and Japanese steel mills fret that they will not be able to get enough to meet their needs. - more

  According to the latest statistics from the General Administration of Customs, China's imports of iron ore fines went up by 14.5% year-on-year to reach 250 million tons in the first eight months of this year. - more

  About 3,000 employees of seven large metal companies across 34 sites are to go on strike in Finland on Monday. - more

  Steel Prices Decline As Oversupply Builds Up - report here

  Courtesy Rusmet - "Baosteel, a key producer of stainless steel in China, seeking to capture a 10% share of the of the global stainless steel market by 2012. The purpose of the scheme is contained in a draft strategic plan for the development of six companies in the year 2007-2012. The company acknowledges that it will not be easy, because its stainless business still lags behind the world's leading manufacturers in such areas as development and accumulation of technologies, product types, the supply of raw materials and to be protected from market fluctuations. The export of stainless steel companies has increased dramatically since 2006, while full export volume is still small. This year, the company expects to export about 20000 -30 000 tons of rolled coil, mainly to Asian markets.

  Ferrochrome prices may rise as much as 50 percent in 2008 from current record levels, said Samancor Chrome Ltd., the world's second-biggest producer of the stainless steel raw material. - more

  Courtesy Dow Jones - "Toledo Mining Corp PLC said through its partly owned subsidiary, it signed a letter of intent with two Chinese companies to form a joint venture to enter into nickel pig iron production within China. It said an existing integrated steel plant in Guangxi province has been identified as a possible target for the joint venture. The venture partners plan to perform detailed due diligence over the next six months before making a decision on buying the assets, the company added. Toledo said it has proposes to convert part or all of the steel plant to produce nickel pig iron, and eventually stainless steel. It also intends to enter into a long term contract to supply all the plant's feedstock requirements on prevailing commercial terms."

  The air is thick that Beijing is mulling over tougher moves to curb massive steel export in early November 2007. The export tax on some steel products may be raised up by 5% to 10% according to sources close to the regulators. - more

  LAKSHMI MITTAL and Ratan Tata have a lot in common. They both come from Indian steelmaking families and both transformed the fortunes of their empires. - more

  China's steelmaking industry cannot sustain its current expansion in production and exports due to limited resource supplies and a deteriorating environmental situation. - more

  ABOUT 30 Chinese nationals flown in from China to work with the Ramu nickel project have been denied entry into the company premises because they lack proper work permits. - more

  HU Jintao wants to make every Chinese twice as rich by 2020. He has done it once - in just five years, per capita income doubled to $US2000 ($2250)- and the only obstacle in the Chinese President's path is the fuel needed to stoke the boiler of China's locomotive. - more

  Investika Ltd said it mined a total of about 220,000 wet metric tons of nickel at its Berong project in Philippines for the quarter ended Sept 30, with record production rates achieved for the months of July and August. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 543 tons = 37,068 tonnes (2.20% - 816 tonnes cancelled warrants/ 36,252 net stock level)
•   Shanghai Jinchuan nickel - 279000-281000 RMB/t, plus 500

  US based Metals Service Center Institute in its latest Metals Activity Report said that demand for metals in the United States and Canada softened further in September and metals service centers continued to reduce inventories to bring supplies into better alignment with the weaker than expected economy and seasonal low order rates. - more

  It is reported that the landed price of Indian iron ore on spot basis in China has extended strong gains since the beginning of October, mostly driven by ocean freight rates. - more

  Denis Battrum Molybdenum Monthly Commentary - pdf here

  Mr Chu Jiandong deputy general manager of Tangshan Steel at Asia Ferrous Metals Development Dialogue 2007 on October 17th 2007 said that "2008 Iron ore benchmark price negotiation will start in early November 2007. The price may rise further, but should not rise over 15%." - more

  National Mining Association Mining Weekly - pdf here

  Environment and Natural Resources Secretary Lito Atienza has suspended tree-cutting permits extended to small-scale mining companies and individuals. - more

  courtesy SteelGuru - "It is reported that China Dongbei Special Steel Group has awarded the Gases Division of The Linde Group a contract for the installation of a new annealing furnace for stainless steel wire. The installation will be the world’s first application of oxyfuel technology in stainless steel wire treatment and demonstrates the wide range of applications that can be improved with this technology. The new annealing furnace for stainless steel wire will combine two of Linde’s technologies, DST and Rebox oxyfuel solutions and the use of oxyfuel will further improve important parameters such as fuel consumption, throughput capacity and emission levels."

  A House committee agreed Thursday to impose the first-ever federal royalties on gold, silver and other hard-rock mining on public lands. - more

  Need an example of how the downturn in housing construction has effected some metals? Compare monthly average for annual imports during the last 7 years for collated and bulk steel wire nails - here (also see US Imports of All Steel Products (thru Oct 16) here

• Today's official LME nickel closing prices - cash - $14.67/lb 3 month buyer - $14.85/lb (1.69% lower than 1/1/07)
• Baltic Dry Index - plus 66 to 10,798. (chart for last few years thru yesterday here)
• LME nickel inventories - plus 108 tonnes into Rotterdam, Netherlands warehouse, minus 60 tonnes from Rotterdam warehouse, plus 66 tonnes into Gothenburg, Sweden warehouse, plus 60 tonnes into Chicago, IL, USA warehouse
• Nickel spent much of the day in the green until late trading drove it down into the red. Very slow news day, typical for a Friday. The big news for the week was the decision by Xstrata to go ahead with the Koniambo project in New Caledonia. The majority of the islanders greeted the news with enthusiasm, but with time, the welcome will wane and Xstrata will face many of the problems CVRD has had with the construction of its Goro project. The question is not when will the mine start producing nickel, but when will the first labor strike delay construction. Signs of a stainless steel rebound are confusing. We think the rebound has started, but no one is stomping on any gas pedals to get it moving. While the news out of Asia is hinting things are firing back up, the price of pig nickel has yet to move up...which is something we are watching as positive evidence. One day we read an article in Chinese media about price increases, the next we see where prices have been lowered because of excess material. Rather confusing trying to get a clear picture of what exactly is going on at street level in Asia. For the last trading day of the week, three month nickel ended at $14.61/lb   ($32,200/tonne). After an exhausting week of ups and downs, nickel ended up over last Friday's close by a mere $.09/lb.    
• Dow Jones Closing Metals Report - more
• Have a safe and restful weekend!!

  China's steelmaking industry cannot sustain its current expansion in production and exports due to limited resource supplies and a deteriorating environmental situation. However, as a net exporter of steel products, China will continue to supply global demand, and increase the number of overseas steel mills in the future, industry analysts told Interfax yesterday. - more

  The new face of CVRD Inco is no stranger to the Greater Sudbury mining camp. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.16/lb
• Bloomberg - more
• Reuters - more
• Forbes - more

  Comment - From the beginning of nickel's bull run, there have been those who have identified two major threats to the nickel market, and their potential adverse effect on long term demand. On the supply side, was the introduction of the so-called "pig-nickel". On the demand side, was the threat of substitution. While we have discussed substitution as a legitimate threat, we have always felt it would more likely affect new product lines, while having a minimal effect on current products, and demand. In our opinion, this lessened the likelihood of any immediate threat to the stainless industry, as it was more likely forcing new product lines and new applications to seriously examine other options. We received an e-mail a few days back that we would like to quote from. "We are a small company that manufactures commercial ..... In the last year I have become aware of a significant number of companies in the commercial kitchen business substituting type 201 stainless for type 304. I believe this trend will continue, whose going to call them on it? We now have 201 sheet, as well 201 tubing readily available. We are still using 304 per our specifications, but I believe 201 will be the norm in the near future. Short term high nickel prices, may ultimately bring long term relief. ... the extreme increase in stainless prices has caused extreme changes in the way we do business" There is an old adage that says "Where there is smoke, there is fire". In the stainless steel world, it is not a question of 'if' there is a fire, rather, whether the smoke is originating from a small campfire, or a large forest fire? The true impact of the higher price of nickel and its immediate effect on nickel-laden 300 series stainless may never be truly known. With world commerce booming, substitution of nickel, alternative grades of stainless, and even the recent downfall in demand in the stainless steel industry, have helped level off the supply/demand picture and given the industry some breathing room, however momentary it may turn out to be. Even if substitution has become a roaring fire, its effect on the overall picture could appear minimal  for the time being. The problem for the nickel industry will come, when supply sources are again plentiful and the consumer looses their current role of a human commodity looking for some precious metal, and nickel becomes the commodity looking for the precious consumer. Only then will they look around and determine how much acreage was permanently lost to the fire. 

  Courtesy Yieh Corp - Taiwan’s Yieh United Steel Corp (Yusco) is likely to raise 300 and 400-series stainless steel production in November on rising orders and a pick-up in domestic and export demands. Besides, Yusco is planning to raise their domestic list price by NT$5,000~8,000/ton in November, due to higher cost of production cost.

  Courtesy/Copyright Dow Jones News - "Market shorts who were waiting for a large nickel stock build into LME inventories, which didn't come in, are now short covering, says one LME trader. Adds, fresh investment money is likely also attracted on improved technical outlook, after LME nickel climbed back through the 100-day moving average around $32,847/metric ton. Adds, October Shanghai contract is expiring - "the shorts on that are delivering hence that is why the stocks are rising." Net against previous month, stocks are actually lower, he says. LME nickel is +1.5% from Thursday's kerb at $33,000/ton."  

  IRON ore giants Rio Tinto and BHP Billiton might be battling infrastructure bottlenecks and train derailments as they race to ramp up production, but at least their trains aren't being stopped by angry, landless peasants. - more

  China imported 250 million tons of iron ore fines in the first eight months of 2007, a growth of 14.5 percent year on year, according to latest statistics released by the General Administration of Customs. - more

  The countdown is launched. It envisages a production of 60 000 tons per annum since 2013, i.e. tomorrow. For better apprehending the challenge which is announced, small review in seven questions. - translated article here

  Courtesy Stainless Steel World - On 8 October 2007, in the process of collective bargaining between the Union of Salaried Employees (TU) and the employer association Technology Industries, TU gave notice on industrial action targeted at seven Finnish metals industry companies, including Outokumpu's Tornio Works. During the evening of 16 October, the National Conciliator Juhani Salonius informed that he has no grounds to make a proposal for a settlement. Therefore, as new negotiations have not been set, the industrial action is likely to start on 22 October 2007 at 11:00am. Should the industrial action start it would mean an almost immediate cessation of production of stainless steel at Outokumpu's Tornio Works.

  Domestic steel scrap prices are on pace to increase by 35% this year because of solid domestic demand combined with explosive global demand that has tightened supply. - more

  Press Release - MB Industries Chicago, IL announces the acquisition of Stainless Foundry & Engineering, Inc., Milwaukee, WI, a provider of steel, low-alloy, stainless steel and other high-alloy composition castings including nickel, cobalt, and copper based alloys produced in green sand, no bake and investment cast processes.

  The Development of China Fastener Industry - part 1 part 2 part 3

  Today's beginning nickel inventory

•   London Metal Exchange - plus 174 tons = 36,534 tonnes (2.22% - 810 tonnes cancelled warrants/ 35,724 net stock level)
•   Shanghai Jinchuan nickel - 279000-280000 RMB/t, plus 4000

• Today's official LME nickel closing prices - cash - $14.33/lb 3 month buyer - $14.52/lb (4% lower than 1/1/07)
• Baltic Dry Index - plus 8 to 10,732.
• LME nickel inventories - plus 558tonnes into Rotterdam, Netherlands warehouse, minus 114 tonnes from Rotterdam warehouse, minus 102 tonnes from Singapore warehouse, and minus 36 tonnes from Busan, South Korea warehouse
• It looked to be another roller-coaster ride for nickel today, with changes in either direction quickly replaced with movement in the opposite direction. That was until late trading, when the dollar traded at a new low against the euro, and nickel suddenly went green with gusto. The market closed before it could consider changing direction again. Three month nickel ended the day at $14.74/lb ($32,500/tonne)
• Dow Jones Closing Metals Report - here
• Reuters - more

  (in brief) A deputy general manager representing Tangshan Steel, one of the 16 Chinese steel mills that will be negotiating with iron ore producers for 2008 pricing, acknowledged to a conference yesterday, that the price of iron ore will most likely increase, but he felt an increase in the area of 15% was most likely.  (more - poor English translation)

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

  China intends to further increase the mining resource tax in near future to better reflect high profits and promote sustainable development in the mineral resource sector, a senior Ministry of Finance (MOF) official told Interfax at the Asia Ferrous Metal Development Dialogue 2007, held in Beijing today.  - more

  Thirteen months ago we wrote up Blue Pearl when it was trading at $6 and said that at $20 moly the stock should be trading well north of $10 per share. As it turns out moly has done better than that, and Blue Pearl, now called Thompson Creek has fared better as well. - more

  BHP Billiton Ltd, the world`s largest mining company, and Philippine metals explorer NiHAO Mineral Resources International Inc signed an agreement on October 17 to look for nickel deposits in the Southeast Asian nation. - more  (we may be wrong, but with this move and others BHP has recently taken, we feel BHP is taking the so-called pig-nickel as a serious supply source with a future worth investing in. On the other hand, since our report on 9/22, the selling price of low grade laterite ore in China has yet to change and reflect any increase in LME nickel)

  An animated tour of an underground nickel mine and surface mineral processing plant has been developed by the Ontario Mining Association (OMA) with assistance from the Nickel Institute. The 15-minute video is designed to interest high school students in a career in mining - here

  Landless peasants blocking a major Brazilian railroad for the second day on Thursday left the Maranhao pellets plant owned by iron ore miner CVRD without raw materials, the company said, urging authorities to drive the protesters away. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.10/lb
• Bloomberg - more
• Reuters - more
• Forbes - more
• IHT - more

  Nickel prices gained by around 5.60 percent this September. Settlement price at the London Metal Exchange (LME) closed at $31,050 per ton from corresponding level of $29,405 per ton on September 3. - more

  Nickel, the worst-performing commodity in the past six months, may rebound by year's end as stockpiles start to shrink and demand increases from stainless steelmakers in China, Mincor Resources NL said. - more

  Behre Dolbear Global Mining News - pdf here

  Behre Dolbear Country rankings for Mining Investment - pdf here

  Standard Bank Commodities Weekly - pdf here

  Extensive report given by Mf Global during LME Week - pdf here

  Canada Minerals and Mining Statistics thru August 2007 - pdf here

  China's demand for nickel and nickel-containing products is set to boost global primary nickel consumption by 8.9 percent to 1.47 million tons next year from 1.35 million tons this year, according to a recent International Nickel Study Group (INSG) announcement. - more

  Stainless and Heat Resisting Steel Crude Steel Production (Ingot/Slab Equivalent) - pdf here

  Major stainless steel mills in Japan and South Korea announced to adjust the stainless steel price. - more According to statistics, Japanese stainless steel output was 270,653 tons in August, decreasing by 11.6 percent compared to last month. - more

  China’s national long holidays have led a pile-up steel stock in the past few weeks. The stainless steel market shows a temporary slow-down after the recovery in late September. - more

  The project had been born in 1992 and, had not since then been saved by criticisms and the handing-over in question. - translated article here

  CVRD Day at the NYSE Oct 15th - pdf here

  Xstrata Nickel Ian Pearce interview - here

  China's exports of finished steel products in September 2007 are reported at 4.44 million tonnes up by 9.1% YoY but down by 17.5% MoM from 5.38 million tonnes in August 2007. - more

  Investika Ltd said it mined a total of about 220,000 wet metric tons of nickel at its Berong project in Philippines for the quarter ended Sept 30, with record production rates achieved for the months of July and August. - more

  Dr. Danko Konchar, CEO of Kermas and Samancor Chrome of South Africa, came to Japan and had an interview with our pressman ( Mr. H. Saitoh ) on the 11th of October at Imperial Hotel in Tokyo. In the form of answering to the queries placed by Mr. Saitoh, Dr. Konchar commented on changes of ferro-chrome situation in the world as follows. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 306 tons = 36,360 tonnes (2.21% - 804 tonnes cancelled warrants/ 35,556 net stock level)
•   Shanghai Jinchuan nickel - 275000-276000 RMB/t, no change

• Today's official LME nickel closing prices - cash - $14.13/lb 3 month buyer - $14.29/lb (5.5% lower than 1/1/07)
• Baltic Dry Index - minus 24 to 10,724.
• LME nickel inventories - plus 108 tonnes into Rotterdam, Netherlands warehouse, minus 120 tonnes from Rotterdam warehouse, plus 102 tonnes into Baltimore, MD, USA warehouse
• Nickel started off in the loss column this morning, plunging by around $500/tonne. Then the US reported home construction starts in the United States fell in September to their lowest level in more than 14 years, which implied economy weak, which implied possible future interest rate cuts, which caused the dollar to fall, which helped the price of nickel to shoot straight up. When it peaked, nickel was up by around $600/tonne, before the enthusiasm suddenly fizzled, and nickel fell back to where it had started the day. Like a roller coaster, after an exciting ride of ups and downs, we ended right back where we started. WBMS reports the worldwide nickel market was still in a deficit during the first eight months of this year, putting them somewhat at odds with the INSG. The decision by Xstrata to proceed with the Koniambo project sends a strong signal that Mr Davis feels nickel prices will stay strong for a very long time. We feel the decision, in part, was made because of the strategic location of the mine in relation to the Asian market. One of the difficulties Brazil is suddenly facing in their iron ore sales, is the ever increasing cost of freight makes them appear less competitive to Asian markets against more regional producers, such as those in Australia. If these freight concerns ever begin to adversely affect Canadian nickel sales to Asia, this mine could help maintain Xstrata's competitiveness in this market, against regional mines in Australia, Indonesia, and others on New Caledonia. BHP and CVRD have strong nickel presence in the area, and this will help insure Xstrata stays in play, along with their other projects. Three month nickel ended the trading day at $14.42/lb (no change) ($31,795/tonne)               
• Dow Jones Closing Metals Report - more

  The global nickel market recorded a deficit of 14,000 metric tons during January to August 2007, the World Bureau For Metal Statistics said Wednesday. - more

  Commonwealth Research - The HARD Line - pdf here

  THINK the mining boom has peaked, that you've missed the investment boat, that the profits have all been taken? Think again. Money is pouring into the sector. - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.09/lb. Currently nickel is in a recovery mode from an early morning drop, and if it keeps current momentum, could crawl back into the black before long. The Koniambo news is very bullish news. Thank you for all the kind wishes for my wife. A barrage of tests has identified nothing as the culprit, but an ulcer as the prime suspect. We tried to get her home last night, but were back in the hospital in a few hours, where we still are. Only the hospital has the ability to keep her out of intense pain.
• Bloomberg - more
• Reuters - more
• Forbes - more

  Nickel prices gained by around 5.60 percent this September. Settlement price at the London Metal Exchange (LME) closed at $31,050 per ton from corresponding level of $29,405 per ton on September 3. - more

  World Bureau of Metal Statistics January to August 2007 Metal Balances - pdf here

  Swiss mining giant Xstrata said on Wednesday it has approved a nickel mining project in New Caledonia with a local partner worth a total 3.8 billion dollars (2.7 billion euros). - more

  Japanese export of stainless steel in August amounted to 100,000 tons, declining by 24 percent compared to the same period of last year. It is also reduced by 7.5 percent from last month. - more

  Soaring shipping freight costs have left Australian iron ore delivered to China effectively selling at a steep discount to the landed cost of competing Brazilian iron ore that comes in from a greater distance. - more

  The steel industry is going to encounter another year of tough sledding for producers and distributors, according to speakers at an industry meeting this past weekend, who don't see an increase in purchasing. - more

  Bloomberg quoted Mr Roger Agnelli CEO of Cia Vale do Rio Doce's as saying that Iron ore prices charged to steelmakers will have to rise in response to surging demand in the spot market. - more

  With some inventories dropping to five-year lows, North American metal service centers report continued slack demand for both steel and aluminum products during September. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus tons = 36,054 tonnes (2.55% - 918 tonnes cancelled warrants/ 35,136 net stock level)
•   Shanghai Jinchuan nickel - 275000-276000 RMB/t, minus 3500

• Today's official LME nickel closing prices - cash - $14.15/lb 3 month buyer - $14.31/lb (5.52% lower than 1/1/07)
• Baltic Dry Index - minus 8 to 10,748.
• LME nickel inventories - plus 60 tonnes into Rotterdam, Netherlands warehouse, minus 30 tonnes from Rotterdam warehouse, minus 102 tonnes from Busan, South Korea warehouse
• After a small initial rise in price, nickel retreated into the red today, and never got its head above water. Media is blaming sub-prime concerns again for the lower trading across the base metal board, with only LME aluminum squeaking out a small gain. For the day, 3 month nickel ended trading at $14.42/lb ($31,795/tonne)
• Dow Jones Closing Metals Report - more

  China's steel product export in September 2007 continued declining to 4.44 million tons, equivalent to 5.07 million tons of crude steel, dropping 6.1% year on year, the least since August 2006. - more

  POSCO said Tuesday its third-quarter net income dropped for the first time in a year due to the rise of iron ore costs. - more

  Courtesy AFX News - "We had a really strong start yesterday with some bullish sentiment coming after LME week, but I don't think there was any fundamental reason for prices to rise that quickly, with little to support the gains,' said Calyon analyst Michael Widmer.

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.25/lb . Base metals across the LME board are in the red this morning, while nickel traded in Shanghai , China and Mumbai, India ended up.
• Bloomberg - more
• CNN - more

  SMM Weekly Review and Forecast (Oct.15-Oct.19) - more

  Damstahl Stainless Steel Report - October 2007 - pdf here

  Commodity Price Update - pdf here

  Nickel futures on the Multi Commodity Exchange (MCX) jumped more than 2% with October nickel trading 2.63% up, at Rs 1,296 a kg, on rising demand from steel makers, analysts said. - more

  Mr. Bruce McKean of the Nickel Institute explains the work being undertaken on recycling rates by the international nickel industry - pdf here.  

  Preliminary figures released by the International Stainless Steel Forum (ISSF) show that stainless steel crude steel production has increased in the first half of 2007 by 9.1% compared to the same period of 2006. Total production for the first six months of 2007 was 15 million metric tons (mmt). During the rest of 2007 ISSF forecasts that healthy demand from end users will remain, but production will slow down considerably due to de-stocking. - more

  Posco, Asia's biggest steelmaker by market value, reported a surprise drop in third quarter profit because of higher iron ore costs and reduced stainless steel production. - more

  Chinese Ministry of Commerce is drawing up regulations to better the qualification of steel traders, likely to raise the access threshold of steel trade to 30,000 tons per year. - more

  Brazil mining giant Companhia Vale do Rio Doce (RIO), or CVRD, is focused on reducing costs, expanding production capacity and becoming the world's top mining company, the firm's chief executive said Monday. - more

  Philippine environment Secretary Lito Atienza on Tuesday ordered small-scale mining operators not to cut trees in their mine sites or their license would be suspended.- more

  The outlook for the steel industry remains strong, Australia's Macquarie Bank said in research report released Monday. "We have made small upgrades to our steel pricing outlook for the next two years to reflect the expected tight supply/demand and the impact of higher raw material prices," Macquarie said. - more

  Today's beginning nickel inventory

•   London Metal Exchange - minus 72 tons = 35,964 tonnes (2.05% - 738 tonnes cancelled warrants/ 35,226 net stock level)
•   Shanghai Jinchuan nickel - 278000-280000 RMB/t, plus 500

• Today's official LME nickel closing prices - cash - $14.70/lb 3 month buyer - $14.83/lb (1.82% lower than 1/1/07)
• Baltic Dry Index - plus 61 to 10,756. (new record high)
• LME nickel inventories - plus 60tonnes into Rotterdam, Netherlands warehouse, minus 66 tonnes from Rotterdam warehouse, minus 138 tonnes from Busan, South Korea warehouse
• Metals Insider credited flooding in Cuba and its potential impact on the nickel mines there for the bullishness in the market this morning. Add a second consecutive drop in nickel inventories stored in LME warehouses, news out Friday that Outokumpu, the worlds fourth largest stainless steel producer, was expanding operations, and news out of Minara Resources, that their nickel operation at Murrin Murrin will be shut down from October 21st thru November 18th for routine maintenance, and it looked like the bulls would be in complete control of the day. But that didn't work out to be entirely true. In most of early trading, prices were up, and at one point, well over $1000 per tonne. But by late afternoon, the market got the jitters and prices retreated into the negative, before struggling back to almost get to where they started. There is more evidence available that the stainless steel market is in the early stages of a potential rebound in Asian markets. Too early to say with certainty that it will stick, but the worst , at least in these markets, may be behind us. For the first day of trading, 3 month nickel ended the day at $14.49/lb ($31,950/tonne)  
• Dow Jones Closing Metals Report -  here

  Fortis Metals Monthly - October 2007 - pdf here

  Haywood Securities - Metals & Mining - pdf here  (much more extensive than usual)

  (reader submitted - few weeks old) India Infoonline - Commodity Report - Nickel - pdf here

  Metals Exploration Plc, developer of a gold and molybdenum mine in the Philippines, plans to produce 1 million tons of nickel ore from Waigeo Island in Indonesia next year, Chief Executive Officer Jonathan Beardsworth said. - more

  Ah, the UP – land above the bridge – unspoiled rivers, crystal blue lakes, fields of huckleberry, and beautiful woodlands. The people who live there are often called Yoopers (from "U.P.-ers") and like folk on this side of the bridge, they have a strong regional identity. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.33/lb Off earlier morning high but still appears to be holding onto its momentum. An inventory slip, higher prices in overseas markets, and more evidence the stainless steel market is on the rebound in parts of the world, is pushing prices higher.  
• Bloomberg - more
• Forbes - more
• Reuters - more

  Weekly Forecast by SMM Specialists - Of 32 analysts responding, 21 (65%) felt the price of nickel would rise this week, 8 (25%) felt the price would be stabile, and 3 (9%) felt the price of nickel would fall.

  Copyright/courtesy Dow Jones Newswire - "Morgan Stanley raises LME nickel average price forecast for 2008 by 16% to $38,581/ton, but lowers 2007 forecast by 6.5% to $38,691 due to slower-than-expected destocking phase by stainless steel producers. Expects nickel price to remain high in 2008 on steady stainless steel demand growth in Asia, recovery in European, North American demand; adds substitution a threat to nickel consumption but believes demand for high-nickel-content steel strong enough to keep prices well above trend. Notes LME nickel's slide to 2007 low of $25,000/ton in mid-August put squeeze on high-cost nickel pig iron producers in China, whose break-even level around $26,000-$31,000/ton suggests prices shouldn't break below those levels."

  China is set to consume up to 6.5 million tonnes of stainless steel this year, up 9.24% from last year's 5.95 million tonnes, a senior industrial official told Interfax at the China Stainless Steel Application Development Forum 2007, held in Taiyuan on Oct.11. - more and another

  China’s Taiyuan Iron and Steel Co. (Tisco) has announced to hike its stainless steel export price to South Korea for the first time since May. - more

  Nippon Steel & Sumikin Stainless Steel Corp., Japan's largest producer of the metal, will resume full-capacity production next month as demand recovers and prices will probably start to rise, the company said. - more

  Macquarie Bank Ltd., Australia's largest investment bank, raised its 2008 forecasts for iron ore, thermal and coking coal, molybdenum and gold. - more

  Norilsk Nickel's board of directors remained intact Friday after Mikhail Prokhorov, who claims to be the single largest shareholder, dropped his earlier demands for its re-election amid reports that he is ready to sell his 25 percent stake. - more

  Today's beginning nickel inventory

•   London Metal Exchange - minus 144 tons = 36,036 tonnes (2.26% - 816 tonnes cancelled warrants/ 35,220 net stock level)
•   Shanghai Jinchuan nickel - 277000-280000 RMB/t, plus 2000

  China media reports the following info/estimates made by ELG Haniel Metal's President Mr. Michael Wright - "estimated that this year stainless steel output will achieve 32.5 million tons, with 17 million tons of this austenite stainless steel, but estimates next year the austenite output will increase to 19.5 million tons (in 2006 was 19.3 million tons). In 2006 the low nickel austenite stainless steel output was 2.6 million tons, in 2007 should be 3.9 million tons, and in 2008 estimated to be 4.6 million tons. In ferritic stainless steel output was 6.4 million ton in 2006, 2007 could be 7.7 million ton and by 2008, 8.4 million tons. Also estimates the price if nickel will stabilize in the $25-$35,000/tonne range."

  Japan's stainless steel manufacturers have settled deals with a successful price increase of US$200/ton to a level of US$4,400-4,600/ton C&F so far in their negotiations on exports of nickel-based CR sheets to China for November shipments. - more

  The prices of nickel-based stainless steel scrap prevailing in Japan and China - South Korea have differed and, by creep along between these two different prices, the dealers concerned have successively risen their prices to collect nickel-based stainless steel scrap from domestic sources of Japan. - more

  Copyright/courtesy Dow Jones - "Of the base metals, Morgan Stanley says it is "most bullish" on nickel and aluminum for 2008. Aluminum production has kept pace with rising demand lately due to high-cost restarts. However, Morgan says, "continued demand growth, coupled with smelter utilization rates at unsustainable levels, should see inventory levels fall and prices rise." Thus, Morgan forecasts aluminum at $2,866 per metric ton in 2008. Meanwhile, Morgan says a price correction since May is likely complete in nickel. Demand remains strong for stainless steel and high-nickel alloys. Morgan looks for a $38,581 price in 2008."

  In 2006, China made certain progress in upgrading non-ferrous metals industry, and the growth rate of fixed assets investment in non-ferrous metals declined somewhat. - more

  Nickel, copper grades at Noront's James Bay Double Eagle project are 'unbelievable' - more here

  The September 2007 Casteel Reporter - pdf here  Steel market condition information - market here

  Blurb - "China will cancel preferential electricity rates for ferro-alloy and primary aluminium producers, the government said on Friday, the latest in a series of moves aimed at limiting growth in energy-intensive sectors."

  Base metal prices will ride a wave of tight supply, dollar weakness and Chinese demand to bolster prices into 2008 but the picture further out is murkier. - more

  Philippine environment Secretary Lito Atienza on Sunday threatened small-scale mining companies they would be stripped of their permits to operate if they exceed their extraction limits. - more

  National Mining Association Mining Week - pdf here

  Commodity Price Update - pdf here

  Every time the price of copper or nickel jumps, Alexis Raney cringes. Each new high means the companies prospecting for metals across the wilds of Michigan's Upper Peninsula, near the shores of Lake Superior, have a new reason to explore. - more

• Today's official LME nickel closing prices - cash - $14.42/lb 3 month buyer - $14.61/lb (3.4% lower than 1/1/07)
• Baltic Dry Index - plus 182 to 10,695. (from Safehaven article today - "While the bulls would claim that the new highs in the Baltic Dry Index is still signaling immense growth, subscribers should keep in mind that the Baltic Dry Index is merely a coincident indicator of the global economy at best - as it is just a representation of spot shipping rates of dry, raw materials. That is, it is a representation of shipping rates for dry, raw materials that is being shipped right at this instant - raw materials that were bought as long as a few months ago, when prices were still high. The recent decline in base metal prices suggests that the Baltic Dry Index will also start to reverse and decline over the next several months." (we disagree with the last sentence of this author's statement)
• LME nickel inventories - plus 60 tonnes into Rotterdam, Netherlands warehouse, minus 216 tonnes from Rotterdam warehouse, plus 60 tonnes into Gothenburg, Sweden warehouse, minus 138 tonnes from Busan, South Korea warehouse, and minus 24 tonnes from Liverpool, England warehouse
• Nickel had one of those confused days of passionate tug and war trading between the bulls and the bears. Nickel started off higher, slipped back some, then way up, then backed off to its starting point, then negative, then quiet, then back higher than earlier, then straight down into the negative. Most of the day spent within a $400/tonne range. While LME inventories show a decline, when considering the drop in cancelled warrants, the net inventory actually grew. For the day three month nickel ended at $14.52/lb ($32,000/tonne). For the week, nickel ended up 2.1%.
• Dow Jones Closing Metals Report - here

  UBS Investment Research Metals & Mining Commodity Update - pdf here

  Allegheny Technologies Inc. fell the most in more than four years on the New York Stock Exchange after the company said third-quarter profit trailed analysts' estimates because of lower demand for stainless steel. - more

  MMC Norilsk Nickel chief executive Denis Morozov told reporters he expects 'robust' demand for nickel in the mid-term, Interfax reported. - more

  Organised gangs are stealing tens of millions of pounds of metal from schools and houses - and even stripped the roof of a magistrates' court - to feed the construction boom in China and India. - more

  Russian billionaire and Norilsk Nickel shareholder Mikhail Prokhorov on Friday dropped a demand that the miner's board be re-elected and is prepared to sell his 25 per cent stake, industry sources and reports said. - more   update

  (blurb) Lehman Brothers raises its 2008 iron ore contract price forecast from plus 25% to plus 50%!!

  (blurb) "Chinese iron ore imports reached 33.24 Mt in September, according to preliminary customs data. This marks a rebound of 4 Mt from August’s total and is up 5.1 Mt year-on-year."

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

• Indications at 7:50 am CST show 3 month nickel selling at basically the same as it started the day - after an earlier huge gain, prices have since retreated.
• Bloomberg - more

  BMO Capital report - The Goods - pdf here

  Copyright/courtesy Dow Jones - "LME nickel is struggling to break above resistance at $34,000 a metric ton, although a move through here would trigger a push towards $38,000/ton, says Triland's Michael Khosrowpour."

  Domestic price of 1# nickel has been rebounding quickly since mid-September and the nickel's price is forecasted to see a turnaround in the fourth quarter of 2007, according to Ministry of Commerce. - more

  Standard Bank Group Ltd., Africa's biggest lender by assets, expects the price of lead, zinc and tin to rise in 2008, while average copper, aluminum and nickel prices may be lower. - more

  Finland’s stainless steel producer, Outokumpu, plans to expand its stainless steel production largely. - more

  Japanese stainless steelmakers are planning deepen production cuts in response to decline in orders. - more

  Blurbs - Courtesy/copyright Interfax

• "Shareholders in MMC Norilsk Nickel (RTS: GMKN) failed to elect a new board of directors at Friday's extraordinary meeting, Andrei Klishas, general director of the Interros holding., told a briefing."
• "MMC Norilsk Nickel (RTS: GMKN) expects nickel prices to stay high in the mid-term, Denis Morozov, the Russian mining and smelting giant's CEO, told reporters. "In general we expect demand will be robust. Demand and orders for nickel are growing this quarter compared with the last, particularly from Chinese stainless steel producers," Morozov said."
• "MMC Norilsk Nickel (RTS: GMKN) produced 75,000 tonnes of nickel in the third quarter and beat forecasts for production of copper, palladium and platinum for 2007 due to new acquisitions, the company said in a press release."

  POSCO will probably report a slight fall in third-quarter operating profit from the previous quarter, a newspaper reported on Friday, quoting an unnamed source close to the world's fourth-largest steel maker. - more

  In 2006, China made certain progress in upgrading non-ferrous metals industry, and the growth rate of fixed assets investment in non-ferrous metals declined somewhat. - more

  China exported 4.44 million tons steel products in September, down 17.47 percent from previous month and marking the third consecutive month in which exports have fallen, according to preliminary statistics released by the General Customs Administration (GCA) today. - more

  SteelBenchmarker™ reported that the U.S. hot-rolled band (HRB) spot price for Oct. 8 rose 0.7 percent to $580 per metric ton, FOB the mill, for the fourth consecutive time. - more

  Bloomberg reported that Philippine nickel ore shipments to China fell for a second month in September after demand for the metal used in stainless steel dropped. - more

  Following on from the seven Climate Change Policy Commitments made this March, leaders of the world steel industry have endorsed a global approach as the best way for steel to help address climate change - more

  Numerous favorable signals point to a resumption of the commodity bull. It had been stalled for almost a year. - more

  The prices of nickel-based stainless steel scrap prevailing in Japan and China - South Korea have differed and, by creep along between these two different prices, the dealers concerned have successively risen their prices to collect nickel-based stainless steel scrap from domestic sources of Japan. This tendency is thought to continue for the time being. - more

  Japan's stainless steel manufacturers have settled deals with a successful price increase of US$200/ton to a level of US$4,400-4,600/ton C&F so far in their negotiations on exports of nickel-based CR sheets to China for November shipments. - more

  The U.S. International Trade Commission has agreed to maintain anti-dumping and countervailing duties on imports of hot-rolled steel products from China and five other countries. - more

  Consider the gargantuan quantities of resources needed to build the automobiles that clog our roads. It takes iron, cadmium, chromium, columbium (called niobium in other countries), manganese, molybdenum, nickel, ruthenium, tantalum, tellurium, titanium, tungsten, copper, vanadium, zirconium, silicon, platinum group metals, selenium, lithium and more. - more

  The United States Congress has just done an enormous favour for investors. It has authorized the release to the public of a report of the conclusions reached by a special committee of the National Academies on “Minerals, Critical Minerals, and the U.S. Economy.” - more

  Do you remember the Aden sisters? Cast your mind back – if you can – to the fevered days of the early 1980s. Then, for a while, they were everyone’s favourite oracle on the gold price. - more

  Today's beginning nickel inventory

•   London Metal Exchange - minus 258 tons = 36,180 tonnes (2.27% - 822 tonnes cancelled warrants/ 34,358 net stock level)
•   Shanghai Jinchuan nickel - 275000-278000 RMB/t, plus 6500

• Today's official LME nickel closing prices - cash - $14.63/lb 3 month buyer - $14.79/lb (2.1% lower than 1/1/07)
• Baltic Dry Index - plus 295 to 10,513. (just broke thru the 10,000 barrier yesterday and already half way to 11,000)
• LME nickel inventories - plus 696 tonnes into Rotterdam, Netherlands warehouse, minus 210 tonnes from Rotterdam warehouse, minus 24 tonnes from Liverpool, England warehouse
• Euro was trading only a penny off its all time record high of October 1st against the US dollar, and this added bullish sentiment to base metal trading today. Shanghai nickel was up, as were nickel inventories stored in LME warehouses. Nickel ended way up on the day, although much lower than its daily high. Three month nickel ended the day at $14.56/lb ($32,100/tonne)
• Dow Jones Closing Metals Report -  here

  China is set to consume up to 6.5 million tons of stainless steel this year, up 9.24 percent from last year's 5.95 million tons, a senior industrial official told Interfax at the China Stainless Steel Application Development Forum 2007, held in Taiyuan yesterday. - more

  The future looks bright for industrial metals, with long term prices supported by rising mining costs, robust demand and U.S. dollar weakness, a Reuters poll shows. - more

  (ok - this is translated from Chinese which means its nearly impossible to read, but apparently Macquarie Research hosts a forecasting conference during the LME week events and here are the results. The charts are easy to read - forecast economy and all base metals ) -  page 1 page 2 page 3 (nickel chart shown)

source article above

  US Aug Nickel Imports +30.1% From Jul, -3.2% From Yr Ago - more  DJ US Aug Nickel Exports +39.5% From Jul, +306.1% From Yr Ago - more

  The maneuvering for position in the booming iron ore industry continues with Murchison Minerals trying to resolve its problems by launching a bid for rival Midwest. - more

  Carpenter Technology Corp., Crucible Specialty Metals Division of Crucible Materials Corp., Electralloy Corp., North American Stainless, Universal Stainless & Alloy Products, Inc., and Valbruna Slater Stainless, Inc. (collectively the Domestic Industry) submitted a letter to the Department expressing a lack of interest in continuing to have the product in question subject to the antidumping duty order. - more

Source - Standard Bank report

  The mining industry anticipates that $28 billion will be invested on equipment alone in Brazil during the next four years. - more

  Australian Stainless magazine - December 2007 issue here

  Morning Indicator

• (8:00 AM CST is 2 PM in London) Indications at 7:50 am CST show 3 month nickel selling up by $.51/lb On news that nickel had rose 1.5% overnight in Shanghai, traders shrugged off yet another inventory gain, and took the price of nickel straight up this morning, where it has spent much of the morning.
• Bloomberg - more
• CNN - more
• CTV - more

  Standard Bank Base Metals Edition for LME Dinner - pdf here (courtesy MetalsInsider)

  TD Bank Weekly Commodity Price Report - pdf here

  World steel production is now expected to reach over 1.35 billion tonnes in 2007. - more

  Preliminary figures released by the International Stainless Steel Forum show that global stainless steel crude steel production has increased in the first half of 2007 by 9.1% YoY. Total production for the first six months of 2007 was 15 million tonnes. - more

  In this LME week, the latest monthly briefing from GFMS Metals Consulting Ltd. notes that many of the fundamentals that were in place in the base metals markets in October 2006 were still in place in 2007. - more

  SINOSTEEL Corp, China's second-biggest iron-ore trading company, expects the contract price for the steel-making ingredient to gain 25 percent next year, driven by increased demand, a company executive said yesterday. - more

  While markets recover from the shock of the collapse of the high risk home loan market in the US, prices of the industrial building blocks traded at the London Metal Exchange have rebounded powerfully. - more

  Rusina Mining expects to begin nickel laterite ore shipments from its Acoje project in the Philippines next month after DMCI advised that the main pier at the Santa Cruz export port will be ready shortly despite interruptions caused by extended monsoonal conditions. - more

  An Indianapolis company says it's developed a battery for electric and hybrid cars that's nothing short of a breakthrough. more  Company website here (most recent announcement in flurry of battery news recently - 2 weeks ago it was reported the US Air Force had developed a 30 year battery (here)

  U.S. demand for materials used in the production of batteries and fuel cells will rise 4.4% per year to $3.8 billion in 2011, according to researcher The Fredonia Group. - more

  Wachovia Report - The Outlook for the Dollar in 2008 - powerpoint here

  Today's beginning nickel inventory/overnight markets

• London Metal Exchange - plus 462 tons = 36,438 tonnes (3.08% - 1122 tonnes cancelled warrants/ 35,316 net stock level)  
• Shanghai Jinchuan nickel - 269000-271000 RMB/t, plus 4000 (high for 2007 May 9 at 450,000 and low August 21 at 239,000)

• Today's official LME nickel closing prices - cash - $13.97/lb 3 month buyer - $14.17/lb (9.18% lower than 1/1/07)
• Baltic Dry Index - plus 358 to 10,218. (new record high and first time at and over the 10,000 mark)
• LME nickel inventories - plus 240 tonnes into Rotterdam, Netherlands warehouse, minus 48 tonnes from Rotterdam warehouse, plus 84 tonnes into Singapore warehouse, plus 60 tonnes into Busan, South Korea warehouse
• The dollar dipped against the Euro again today, helping base metals climb, across the board. Nickel was no exception, and even with further inventory gains, trading was higher. CNBC reports the annual LME dinner last night was full of  "cautious, medium-term optimism", and Antaike reports imports of nickel into China, including the so-called pig nickel, has soared 52% over last year. We posted an interview from the LME CEO, where he advises "we will soon be coming to a metal dear to you". Molybdenum traded on the LME? It's being looked at. Now that they are about to trade steel, maybe stainless steel is in the future. Wouldn't that just be peachy! Then again, with nickel the primary cost factor to most grades of austenitic and many grades of duplex stainless, in a way, they already are. After a momentary retreat in early afternoon trading, nickel shot back up, where it spent the rest of the afternoon playing the up and down game, but in a tight range. For the day, three month nickel ended at $14.29/lb ($31,495/tonne)
• Dow Jones Closing Metals Report - here

  Analysis/Forecasts/Reports

•   Base metal prices were higher across the board in London on the back of bullish sentiment stemming from the aftermath of last night's culmination of the London Metal Exchange week, the LME dinner, where the atmosphere of cautious, medium-term optimism has proven enough to push up the complex today. - more
•   Stainless steel crude steel production increased in the first half of 2007 by 9,1% compared with the same period of 2006, the International Stainless Steel Forum (ISSF) said on Wednesday. - more
•   Preliminary figures released by the International Stainless Steel Forum (ISSF) show that stainless steel crude steel production has increased in the first half of 2007 by 9.1% compared to the same period of 2006. Total production for the first six months of 2007 was 15 million metric tons (mmt). - report here

  Nickel/Stainless Steel/Mining News

•   Bloomberg TV interview with Martin Abbott, CEO of the London Metal Exchange - here
•   Jindal Stainless is looking to make full use of the Ferro Chrome supply deficit in the world market. - here
•   ThyssenKrupp AG and Salzgitter AG, Germany's two largest steel mills, raised the issue of anti-dumping sanctions against Chinese steel product exports at the International Iron and Steel Institute AGM held in Berlin on Monday, according to a report by Beijing-based Custeel yesterday. - more
•   Current EU anti-dumping investigation of interest - ferromolybdenum - excel here (look at R.406 - and you were maybe wondering why the Chinese have been shipping so much moly to Europe lately?)
•   Ongoing anti-dumping review in US on "Stainless Steel Bar From France, Germany, Italy, Korea, and the United Kingdom" here
• Nothing like a bunch of free trade news to get you wanting to export, eh?

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.27/lb
• Bloomberg - more
• Financial Times - more
• Forbes - more

  Analysis/Forecasts/Reports

•   China's total nickel output, including the metal contained in nickel pig iron, is expected to reach 213,000 metric tons this year, up 52% from last year, according to Chinese metals research firm Antaike Information Development Co. - more
•   Sinosteel Corp., China's second- biggest iron-ore trading company, expects the contract price for the steelmaking ingredient to gain 25 percent next year, driven by increased demand, a company executive said. - more
•   Specialty Metals Industry Group Releases Six Month Market Data - pdf here
•   It is reported that nickel prices have bottomed and are likely to stabilize as SS makers have started buying to build their inventories. - more
•   (courtesy Financial Times)  Lakshmi Mittal, CEO Arcelor Mittal, the world's largest steel group to reporters - "There is media news that there will be a 25% increase in iron ore costs, but it could be anything. It is all just media news," he said. "We have not started negotiations with iron ore companies yet," he added.

  Nickel/Stainless Steel/Mining News

•   Japan imported some 16,715 tons of stainless steel product in August, a 28.9 percent drop compared to last month, and a 14.9 percent up year-on-year. - more
•   Philippine nickel ore shipments to China fell for a second month in September after demand for the metal used in stainless steel dropped. - more
•   South Korea's Public Procurement Service, a state-run body that manages commodity stockpiles, bought 300 metric tons of nickel and 100 tons of tin in tenders today, both from Daewoo International Corp. - more
•   South Korea's Posco, the world's fourth biggest steelmaker, would be keen on a sizeable merger with a suitable US or European company if the right opportunity presented itself, according to the company's chief executive. - more
•   Mining companies in China, the largest consumer of copper, iron ore and coal, are likely to buy more metal deposits and oil fields in Africa, Latin America and Australia to feed rising domestic demand, an official from Citigroup said Tuesday. - more

  Economic/Interesting/Other

•   The International Monetary Fund will cut its 2008 growth forecast for all major economies in its World Economic Outlook after the U.S. subprime mortgage lending crisis, a person with access to the report said Tuesday. - more
•   The Russian government has become the first in the world to tell Lakshmi Mittal to take his cash and his steelmills elsewhere. - more
•   China has more billionaires than any country except the United States, as soaring stock and property prices helped to boost wealth among the country's super-rich, researcher Rupert Hoogewerf said on Wednesday. - more
•   It is reported that in response to European steel industry executives move for the imposition of antidumping duties against China's fast growing imports, European steel consumers have opposed any reductions in imports of Chinese steel saying that they are already facing shortages of steel. - more
•   While markets recover from the shock of the collapse of the high risk home loan market in the US, prices of the industrial building blocks traded at the London Metal Exchange have rebounded powerfully. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 336 tons = 35,976 tonnes (3.19% - 1146 tonnes cancelled warrants/ 34,830 net stock level)
•   Shanghai Jinchuan nickel - 265000-267000 RMB/t, plus 1000

• Today's official LME nickel closing prices - cash - $13.72/lb 3 month buyer - $13.83/lb (9.18% lower than 1/1/07)
• Baltic Dry Index - plus 195 to 9,860. (new record high)
• LME nickel inventories - plus 240 tonnes into Rotterdam, Netherlands warehouse, minus 30 tonnes from Rotterdam warehouse, minus 18 tonnes from Busan, South Korea warehouse
• Nickel ended the day in the positive, although it was an up and down ride to get there. Activity was slow as traders readied themselves for the big LME dinner tonight. Much of the news coming from London is a mixed bag of short term bullishness, followed by long term bearishness, at least for nickel. Except for the Norilsk's Chief Economist, who will never be accused of 'pump and dump', the majority of the reports seem to reflect forecasts of a forthcoming rise in nickel prices, followed by a downturn sometime next year. In the mean time, a price stabilization is what stainless steel producers are after, and this is appears to be what traders are trying to avoid. Three month nickel ended the day where it did on Thursday and Tuesday of last week, at $13.93/lb ($30,700/tonne)      
• Dow Jones Closing Metals Report - here

  Analysis/Forecasts/Reports

•   Haywood Securities - Metals & Mining Weekly - pdf here
•   In the week ending October 6, 2007, domestic raw steel production was 2,137,000 net tons while the capability utilization rate was 90.1 percent. - more
•   (ISSF Reports) Global Consolidation All Stainless - Apparent Supply vs Real Fabrication - pdf here   Detailed Global ISSF Stock Cycle Review - excel report here  All Stainless Products Global Stainless Steel Demand Index - pdf here

  Nickel/Stainless Steel/Mining News

•   Salzgitter AG has not been affected by the decline in the price of some steel products, including stainless steel, in the third quarter that prompted peer Kloeckner & Co to issue a profit warning last night, chief executive Wolfgang Leese told Thomson Financial News. - more
•   Kloeckner & Co last night said its full-year operating profit will be hit by the 'unsatisfactory' development of the price of some steel products including stainless steel in the third quarter. - more
•   ThyssenKrupp AG, Germany's largest steelmaker, expects to report its ``best'' full-year results as demand grows for carbon steel, Chief Executive Officer Ekkehard Schulz said. - more
•   The European steel industry is preparing an anti-dumping complaint with the EU against low-priced Chinese steel imports, industry executives said ahead of the annual conference of the International Iron and Steel Institute, which takes place this week in Berlin. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.23/lb
• Bloomberg - more
• Forbes - more

  Analysis/Forecasts/Reports

•   Metal Bulletin reports that a senior Norilsk Nickel executive told a press briefing in London Monday, that three-month nickel price will level off "well above" $20,000 per tonne when current volatility calms. And Dow Jones quoted  David Humphreys, Chief Economist at OAO Norilsk Nickel, yesterday, "The reality is that high nickel prices have created an incentive for people to go out and try alternatives."
•   LME Week Presentations from Day 1 - here (nickel related - Nickel, Tin, Zinc and Lead: Paul Robinson, Group Manager - Non-ferrous Metals, CRU Group presentation - pdf here)
•   GFMS Metals Consulting Ltd Market Analysis: Nickel - monthly report here
•   Behre Dolbear's Weekly Newsletter for the Mining Industry - weekly report here
•   The International Iron and Steel Institute (IISI) forecasts 2007 will be another strong year for the steel industry with apparent steel use rising from 1,120.9 mmt in 2006 to 1,197.6 mmt in 2007, an increase of 6.8%. - more
•   courtesy/copyright Dow Jones - "Nickel prices appear to be bottoming out as stainless mills begin to slowly restock, says Credit Suisse, and this could push LME prices significantly higher. Notes nickel supply growth is likely to be 4.6% in '07 and 5.3% in '08, in an industry where nickel demand can swing from 0% to 10% "depending on the restocking and destocking cycles of the stainless producers."
•   For the first time since the base metals bull market started in 2001, the mining executives, metal traders and investors gathering for the London Metal Exchange week’s dinner tonight face an uncertain outlook. - more
•   In 2006 China jumped over Japan, Russia and the EU25 to become the World's biggest steel exporting country. China's new pre eminence as top exporter has seen an increase across most product groups and across most export markets including Europe, North America and South America. - more

  Nickel/Stainless Steel/Mining News

•   The London Metal Exchange stepped in to change its lending guidance for nickel over the summer because it saw a risk of disorder in the market, the exchange's chief executive, Martin Abbott, said Monday. - more
•   Communist rebels said Tuesday they attacked an Australian mining firm in the northeastern Philippines to force its closure and warned of similar raids on any foreign mining company in the region. - more
•   courtesy/copyright Dow Jones - "Russia exported 166,800 metric tons of nickel in January-August, 0.6% less than a year earlier, the Federal Customs Service reported Tuesday. The exported nickel was worth $6.209 billion compared with $3.192 billion a year earlier."
•   Japan’s steelworks intend to raise the export prices of nickel-based stainless steel cold rolled sheet by US$200/ton for November shipments to China. - more
•   Two weeks after its closure, a firm operating small-scale mining of nickel in Tubay, Agusan del Norte is now trying to secure a large-scale mining permit over the same area but an environmentalist group is blocking the plan.- more
•   Philippine nickel ore shipments to China fell for a second month in September after demand for the metal used in stainless steel dropped. - more
•   courtesy Stainless Steel World - "Ferro Alloys Corp. (India) has made plans to build a new plant to produce 500,000t/y of stainless steel. Facor Steels is also setting up a 2000tn forging press at its existing plant to produce forged bars. This unit will have a capacity of 12,000t/y and is expected to be commissioned by April 2008."
•   BCL General Manager Montwedi Mphathi has for the first time spoken about why he cut short his worldwide tour of LionOre facilities. - more
•   Seventeen-ton retirees, some 600 of them, will soon be living out their golden years on the Jersey Shore, where they will see plenty of scuba diving and fishing. They are part of more than 1,600 stainless-steel passenger and work-crew subway cars that will head to their new homes off the Garden State and farther down the Eastern Seaboard starting in the late fall. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 192 tons = 35,640 tonnes (3.20% - 1140 tonnes cancelled warrants/ 34,500 net stock level)
•   Shanghai Jinchuan nickel - 264000-266000 RMB/t, minus 1000

• Today's official LME nickel closing prices - cash - $13.38/lb 3 month buyer - $13.61/lb (10.95% lower than 1/1/07)
• Baltic Dry Index - plus 130 to 9,665.
• LME nickel inventories - plus 294 tonnes into Rotterdam, Netherlands warehouse, minus 66 tonnes from Rotterdam warehouse, minus 18 tonnes from Singapore warehouse, minus 12 tonnes from Busan, South Korea warehouse
• Nickel slipped back under the $30,000/tonne mark today, but by afternoon had crawled back over. Metals Insider was rather bearish on nickel today, and worth reading (permanent link posted in left column). The market was banking on China buyers coming back from vacation and buying a lot of nickel. This didn't pan out, so nickel, as well as most base metals traded on the London Metal Exchange, had a down day. Nickel traded in Shanghai fell 3% its first day back. Now that China is back to work, their movements will be watched closely. It's LME week in London , and many players are in town to attend meetings and do business. The market has been known to make some big movements during these meetings, as traders, producers, and buyers mingle and talk amongst themselves. For the day though, 3 month nickel ended at $13.65/lb ($30,100/tonne)
• Dow Jones Closing Metals Report - here

  Happy Thanksgiving to our Canadian readers. Here is a video that has brought many a chill here

  Analysis/Forecasts

•   Copyright/courtesy Thomson Financial News - "Metals have been sold aggressively since first thing this morning after losing confidence when the Chinese failed to react as expected after their week-long break and start on a buying programme," said analysts at RBC Capital Markets." "LME week kicks off today with meetings with market participants and initial negotiations beginning between miners and smelters on (treatment and refining contracts) for copper and zinc -- the so-called mating season," said John Reade, an analyst at UBS. "Historically, significant price moves have occurred during LME week, exacerbated by thinner volumes, particularly on Wednesday morning following the previous evening's LME dinner," he said."
•   Price direction for industrial metals in 2008, including nickel, will be largely swayed by broader macroeconomic developments in 2008, David Humphreys, Chief Economist at OAO Norilsk Nickel (NILSY) told Dow Jones Newswires Monday. - more

  Nickel/Stainless/Mining News

•   High-carbon ferrochrome prices in the US edged higher this week on spot market, consumer business, although some participants think that a resumption of sales from the Defense National Stockpile Center could halt the latest run up in the market. - more
•   Despite China being on holiday all of last week, the Brazil-to-China iron ore freight rate soared to new-record levels of between $85/mt-91/mt, based on the standard 160,000-mt cargo. Early last week, rates for the route peaked at an all-time high of $200,000/day, or $81.25/mt. - more

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

• Indications at 7:55 am CST show 3 month nickel selling down by $.55/lb . Market has been in a slow decline since beginning of day.
• Bloomberg - more
• Reuters - more
• Forbes - more

  Analysis/Forecasts

•   The London Metal Exchange stepped in to change its lending guidance for nickel over the summer because it saw a risk of disorder in the market, the exchange's chief executive, Martin Abbott, said Monday. - more
•   Weekly Forecast by SMM Specialist - here
•   Copyright/courtesy Dow Jones - "Nickel prices appear to be bottoming out as stainless mills begin to slowly restock, says Credit Suisse, and this could push LME prices significantly higher. Notes nickel supply growth is likely to be 4.6% in '07 and 5.3% in '08, in an industry where nickel demand can swing from 0% to 10% "depending on the restocking and destocking cycles of the stainless producers." "Consolidation of the mining industry into financially strong industrial groups is providing the exploration and development capital to pursue major resources, but the scarcity of world class deposits in copper and nickel has been an impediment to a ramp up in metal supply, says Mitsui Bussan Commodities Limited. " "Nickel stocks held by exchanges, industry to continue torise in short-term, which should soften prices, says Macquarie Research." "LME nickel retains Friday's gains after LME lifts nickel lending guidance imposed June 6 to stop market becoming disorderly; move past $33,000/ton likely to trigger upside stops, says Triland analyst Michael Khosrowpour; adds upside advances past $36,000 appear capped for now as result of current high underlying stock figures"
•   Lead will beat all other metals traded on the London Metal Exchange next year, because of a sixth consecutive annual shortage, Mitsui Bussan Commodities Ltd. said. - more
•   Natixis Commodity Markets - Q4 Base Metals Review - courtesy MetalsInsider - pdf here
•   Over the past 50 years a slowdown in the United States economy has almost always meant sharply lower prices. This time, however, is likely to be different. - more

  Nickel/Stainless/Mining News

•  China Nickel Resources Holdings plans to invest at least 6 bln yuan by 2011, primarily in Indonesia, to boost its stainless steel production capacity, the South China Morning Post reported, citing the company's chairman Dong Shutong. - more
•   The building of a $600-million nickel project in Myanmar has been delayed because of the government's request for a larger stake and political unrest in the country, an official at the Chinese partner said on Monday. - more
•   It was outdated, inefficient and unnecessary. In a modern, wired-up economy, what place was there for boisterous men in suits doing deals by standing in a circle yelling at one another? - more
•   Xinhua cited Mr Zhang Xiaogang chairman of China Iron and Steel Association as saying that the western anger over surging Chinese steel imports is unreasonable and runs against the concept of globalization. - more
•   Platts reported that, during the official launch of the USD 3.6 billion steel slab plant JV between Baosteel and CVRD, an executive with Brazil's CVRD told Platts that contract negotiations over iron ore prices for 2008 have not yet begun. - more
•   Chinese mining firms were conspicuously absent from a wave of takeovers in the sector over the last two years but now it is a matter of when, not if, they start landing deals across the world. - more
•   The news that the governments of Orissa and Karnataka are reassessing their iron ore reserves, point clearly to the fact that the current estimates of the country's resources may be larger than known so far. - more

  (not metals related but very concerning) Trading the skeletal remains of World War II dead has become a lucrative trade in Papua New Guinea’s Northern Province. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 198 tons = 35,448 tonnes (3.10% - 1098 tonnes cancelled warrants/ 34,350 net stock level)
•   Shanghai Jinchuan nickel - 265000-267000 RMB/t, minus 8500

•   PT Antam Tbk reports it is operating the FeNi III ferronickel smelter at a power load of 20MW, following the completion of partial repairs on August 26. - more
•   (excerpt) "As of September 2004, the United States had stockpiled 17 kinds of metals, including rare metals, worth about 1.57 billion dollars (about 180 billion yen). Meanwhile, Japan had stockpiles of only seven kinds of metals, including nickel. China does not reveal the quantity and items it stockpiles, but it does have nickel, manganese and chrome squirreled away. Russia also is believed to have stockpiled rare metals, but refuses to disclose precisely what it has or how much. Securing sufficient resources has become an important national strategy. " - more
•   The purchasing manager's index (PMI) for the manufacturing sector rose to 56.1 points in September from 54 in August, the China Federation of Logistics and Purchasing (CFLP) said. - more

  Analysis/Forecasts/Reports

•   National Mining Association Mining Week - pdf here
•   Desjardins Monthly Review of Prices of Commodities - pdf here
•   Precision Machined Products Association Material Impacts Report - October 2007 - pdf here

  Stainless/Nickel/Mining News

•   Coos County commissioners Thursday afternoon backed the county Planning Commission in its approval of a conditional use permit allowing a chromite mining operation on 2,000 acres of mixed use forest lands. - more
•   Philippine stainless steel manufacturer Sanyo Seiki Stainless Steel said the rising demand of stainless steel in the Gulf region signals new opportunities for SME home building companies. - more
•   "Outokumpu of Finland, a manufacturer of stainless steel, plans to set up a cold rolling mill in India at a cost of $272.44 million. The capacity of the proposed plant would be 2,50,000 tonnes." - courtesy Financial Times
•   The European steel industry is preparing an anti-dumping complaint with the EU against low-priced Chinese steel imports, industry executives said ahead of the annual conference of the International Iron and Steel Institute, which takes place this week in Berlin. - more
•   "The fall in demand for stainless products will reach its trough in the fourth quarter of the calendar year 2007. After that, we will see a positive development again. Demand in the stainless segment has fallen in the past few months as high nickel prices have caused consumer uncertainty, and due to over-capacity in the market on strong imports from China, Fechter said. As a result, ThyssenKrupp Stainless lowered its European production capacity by almost 30% in the second half of its fiscal year, Fechter (CEO Juergen Fechter) said." - courtesy Dow Jones
•   Joseph Simon & Sons’ 12-acre yard on the Tacoma Tideflats is filled with mountains of what some may call junk. There are bales of crushed aluminum cans and cardboard boxes loaded with used bullet casings. There are mounds of wheels and extension cords, boxes of old faucets, stacks of aluminum siding. - more

  Other stories/links

•   After more than a month of speculation, the "world's largest diamond", said to be twice the size of the famous Cullinan diamond, was on Friday denounced as a "piece of plastic" by the man at the centre of the drama over its discovery. - more
•   The Trend Trader - US Markets for Monday, Oct. 8 - here (one time link so if you like it, please bookmark it)
•   Fred Sturm was a big buyer at Wall Street's fire sale this summer, scooping up loads of bargains for his $7.5 billion Ivy Global Natural Resources. Decisive moves like that, into assets ranging from raw metals to the stocks of mining companies and energy concerns, have helped the fund post annualized returns of more than 30% for the past five years. - more
•   Huangdao was once a forgotten fishing village, a short ferry ride from the beer and beach town of Qingdao. Now, a dozen years later, it is Australia's entry point to the world's largest and fastest industrial revolution. - more
•   Deos stainless steel soap. Uses “oxido-reduction” for “getting rid of persistent odors which penetrate the skin while cooking.” Those include garlic, onions, fish and nicotine (although we don’t recommend cooking with cigarettes). “Needs no maintenance.”- more

  Trouble in the Philippines

• Green groups Friday demanded justice for slain environment activist Armin Marin and called for an end to mining explorations on pristine Sibuyan Island in Romblon province, south of Manila. - more
• The top official of Sibuyan Nickel Properties Development Corp. (SNPDC) said Saturday its personnel were the "victims" in the Wednesday killing of an anti-mining activist in San Fernando, Sibuyan Island. - more
• Panalipdan! Mindanao, a network of church and sectoral organizations and NGOs, issued a statement in support of the outburst of community resistance taking place in Tampakan, South Cotabato this week. - more
• RODNE GALICHA is one of the staunch advocates against mining in Sibuyan. He sent me an email about mining on that island. He relates that Sibuyan Aton Manggad (SAM), Sibuyan Our Wealth, was formally formed on July 2, 2006, simultaneously during an assembly of concerned Sibuyanons in Intramuros, Manila, (supported by concerned citizens abroad) and a pastoral meeting at the Shrine of Our Lady of the Immaculate Conception in San Fernando, Romblon, both with the purpose of discussing the mining issue in Sibuyan Island. - more
• Town Councilor Armin Marin clearly understood how dependent Sibuyanons were on the exceptional ecology that characterized their island home. - more

• Today's official LME nickel closing prices - cash - $13.62 3 month buyer - $13.83lb  (9.18% lower than 1/1/07)
• Baltic Dry Index - plus 22 to 9,535.
• LME nickel inventories - plus 2,058 tonnes into Liverpool, UK warehouse, plus 360 tonnes into Singapore warehouse, plus 12 tonnes into Rotterdam, Netherlands warehouse,  minus 18 tonnes from Singapore warehouse, and minus 90 tonnes from Rotterdam warehouse.
•  Comment - Even on vacation, days like today we find incredibly distasteful. Nickel prices were headed down this morning, as they should have been. Inventories of nickel in LME warehouses had grown overnight by nearly 7%. The INSG had issued a shocking forecast only two days ago that the nickel market would end 2007 in surplus. The only bullish news to be found today was an Australian mining company had lowered its 2007 forecast for the second time... by an amount less than the stock that arrived overnight into the Liverpool warehouse. Thus, the market was set-up to have a down day. Then the London Metal Exchange decided to undo something it had done earlier in the year. After nickel had peaked out in early May, on June 6, the London Metal Exchange issued a rule change that threw the market into turmoil, and sent prices diving. This rule took a giant step forward in halting major nickel traders from "manipulating" the market. According to Dow Jones "The lending guidance is a measure to prevent trading from becoming disorderly when one or a consortium of market participants has a dominant long position in the market." Today, this rule was undone. Cancelled! According to the LME, the "circumstances no longer require it." (i.e. there is enough inventory in LME warehouses to make it more difficult to manipulate the numbers) The message to all those who consume nickel? The nickel market is once again free to be manipulated by a few players who have been invited to the private trading club in England. LME Metals Seminar 2007 starts Monday, and apparently this was their gift to themselves. Cancelled warrants now return to the useless information category. What should tell us what is sold and ready to ship from LME warehouses, can now mean no more than what large traders have purchased to make inventories look smaller than they really are. Very discouraging. This decision will add fuel to the fire of those Asian stainless steel producers who dare to question the LME price, and will only encourage users to seek other avenues. Maybe other worldwide stainless steel producers will join them. Back in London, nickel traders were giddy and three month nickel ended the day at $14.22/lb ($31,350/tonne)
• Dow Jones Closing Metals Report - more
• Have a safe and restful weekend. Looks like next week is gearing up to be interesting, with China returning to work.

  LME Nickel Shoots +4.5% After LME Lending Guidance Change - more  

  Analysis/Forecast

•   Nickel: Demand Destruction or Destocking - "The International Nickel Study Group issued their forecast for 2007 and 2008 today. They are expecting a surplus of roughly 120,000t this year, followed by a surplus of 100,000t next year." - good comments here

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

• Indications at 7:55 am CST show 3 month nickel selling down by $.05/lb . We expect some strong downward pressure on traded nickel today, and we disagree with the trader that told Dow Jones that the overnight 7% gain in LME nickel inventories was "likely already priced in".
• Bloomberg - more
• CNN - more

  Analysis/Reports/Forecasts

•   Presentations from the International Nickel Study Group and their meeting this week - here 
•   Standard Bank Commodities Research Weekly - pdf here
•   "LME nickel prices fall modestly after a large 3222 ton stock addition to LME warehouses in data Friday. Traders have been talking of around 3000 tons of nickel expected to arrive in LME warehouses in Europe this week, so the news is likely to have been priced in, a LME broker says." copyright/courtesy Dow Jones Newswire
•   "Rally in LME nickel price since bottoming near $25,000 mid-August has encouraged China's nickel pig iron producers to resume output, despite government efforts to curtail production at small blast furnace producers, says Macquarie Research; "as a result, we expect a gradual drop in limonite ore stocks at Chinese ports and a recovery in Chinese nickel production in the fourth quarter." Estimates about 4 million tons of Imported limonite ore, or low content nickel ore, sitting in Chinese ports following production cuts by nickel pig iron producers, stainless steel mills in July, August." copyright/courtesy Dow Jones Newswire
•   Scotia Capital has recently initiated coverage of three molybdenum equities, revising its moly price forecast for this year from $25.25/lb to $30.43/lb, the 2008 forecast from $19.25/lb to $33.25/lb, its 2009 forecast from $8/lb to $27/lb and long-term forecast from $7.50/lb to $12/lb. - more
•   Investors and economists remain deeply divided over the question whether Chinese economic growth is due for a (mild) slow down, or not. - more

  Stainless/Nickel/Mining News

•   Minara Resources Ltd. Friday downgraded its full-year nickel production forecast for the second time in four months. The Perth-based company said it now expects full-year nickel output from its Murrin Murrin mine in Western Australia to be between 28,000 and 30,000 metric tons. - more
•   The Canadian dollar's rise to parity with its American counterpart will take a bite out of Canadian miners' third-quarter earnings, although the impact could be muted for companies with diverse international holdings, analysts say. - more
•   Russian metals giant Norilsk Nickel said on Friday nickel sales were 103,000 tonnes in the first half of this year, down 12 percent year-on-year, while palladium sales rose 7 percent to 1.55 million ounces. - more
•   Small-scale Philippine nickel miner SR Metals Inc has temporarily halted operations at its mine in the south of the country after local bishops complained it had violated environmental laws, a government source said on Friday. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 2,322 tons = 35,250 tonnes (2.77% - 978 tonnes cancelled warrants/ 34,272 net stock level)
•   Shanghai Jinchuan nickel - markets closed this week

Thursday, October 4

• Today's official LME nickel closing prices - cash - $13.74 3 month buyer - $13.97lb  (8.08% lower than 1/1/07)
• Baltic Dry Index - minus 48 to 9,513.
• LME nickel inventories - plus 84 tonnes into Gothenburg, Sweden warehouse, minus 95 tonnes from Rotterdam, Netherlands, warehouse and minus 24 tonnes from Singapore. Third day of net loss in physical inventory for day when considering cancelled warrants.
• On vacation today in Eureka Springs, Arkansas, the wife wants to go spend money, so must keep this short. Considering the bulletin issued by the International Nickel Study Group yesterday of a forecast supply surplus this year, nickel held up pretty well today. While it did loose ground it stayed well above the $30,000 tonne mark. LME 3 month nickel ended the day at $13.93/lb ($30,700/tonne) 

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

• Indications at 7:55 am CST show 3 month nickel selling down by $.32/lb  . As we have posted numerous stories on Philippine terrorism in anticipation of what has now happened, the fact that it has, is very concerning. While no one was killed and damage appears to be light, the precedence is chilling. Another drop in LME inventories is also supportive of nickel today. But none of this has been enough to offset yesterday's INSG bombshell. The possibility of an annual surplus in nickel supply is news nickel traders do not like to hear.
• Bloomberg - more

  Analysis/Reports/Forecasts

•   The Spring of 2007 may be remembered as the peak of an extraordinary five-year run in base-metals prices that saw some metals reach twice their previous historical highs, then defy projections and continue even higher. - more
•   Market Tendency On Imports Of Ferro-Alloys At 28th September 2007 - more
•   MEPS reported that June 2007 was the peak month for stainless steel selling values. It said that “The third quarter and much of the final trimester will prove to be a tough period for all stainless steel producers. - more

  Stainless/Nickel Mining News

•   Stainless steel depots are full throughout North America, mills have seen new-order bookings evaporate and early autumn prices for workhorse grade Type 304 cold-rolled sheet are collapsing - more
•   Pelican Resources Ltd says a protester has been shot in the vicinity of its nickel project on Sibuyan Island in the Philippines. Pelican said the victim was among a small group of protesters outside the Filipinos Top Rock mine near-by its operations when gunned down. - more
•   Communist rebels raided an Australian mining company in the central Philippines, torching heavy equipment and vehicles and stripping - security guards of cell phones and weapons, the military said Thursday. - more

  Today's beginning nickel inventory

•   London Metal Exchange - minus 36 tons = 32,928 tonnes (3.08% - 1014 tonnes cancelled warrants/ 31,914 net stock level)
•   Shanghai Jinchuan nickel - markets closed this week

Wednesday, October 3

• Today's official LME nickel closing prices - cash - $14.06 3 month buyer - $14.24/lb  (6% lower than 1/1/07)
• Baltic Dry Index - minus 5 to 9,561.
• LME nickel inventories - plus 102 tonnes into Baltimore, US warehouse, minus 36 tonnes from Rotterdam, Netherlands, warehouse and minus 12 tonnes from Singapore. Gain in cancelled warrants caused a net loss in physical inventory for day.
•  This was one of those days, we believe, where it was computers telling traders when to buy, and thus controlling the price. It's a story of support, and resistance, puts, and calls, and all sorts of trading variables we don't pretend to understand. If you need a clearer picture, we suggest you find a serious investor in your office and have them explain it to you. The fact the market held and didn't fall below the "support" line the last few days, told traders the market had room to push up. Then when it approached the "resistance" line, some computers told traders to back off and see if it could break thru resistance and hold. Now that's an elementary layman's explanation of something far more technical than we make it out to be. The dollar's value, or the sudden lack thereof, is also adding strong support to commodities. And while nickel inventories actually grew today, with cancelled warrants taken into consideration, we saw a second day of declines. Not sure what happened to that rumor floating around London yesterday that another 3-6,000 tonnes of nickel was heading for LME warehouses, but if the rumor has merit, it hasn't shown up yet.  And then, as the days trading ended, INSG released their report, with a forecast that the world nickel market will end the year with a 120,000 tonne "surplus". Can you spell "bombshell"? Don't be surprised to see nickel head south tomorrow. LME three month nickel ended the day at $14.29/lb ($31,500/tonne)  
• Dow Jones Closing Metals Report - here

  Reports/Analysis/Forecasts

• Dow Jones Newswire (copyright) LME nickel shoots up 4% Wednesday as fresh buying from US funds fuels a technical bounce, triggered when support at $30,000/ton held Tuesday, says an LME trader. Notes spec fund buying and selling of downside puts for Nov and Dec. Sees technical resistance at $32,100/ton, - "through there and it might fly," he says.
• Fortis  - Asian Metals Monthly - September 2007 - pdf
• MEPS - Stainless Steel and Nickel Forecast - here
• MEPS - Composite Steel Price - Latest Forecast - here
• INSG - The world market for nickel is expected to be in a 120,000-metric-ton surplus this year, the International Nickel Study Group said Wednesday. - here (press release from INSG here)
• Australia - Australian iron ore prospector Centrex Metals Ltd, backed by Chinese steel mills, on Wednesday said the upward trend in ore prices was set to continue for another four years. - more
• Purchasing - Big drop seen in nickel prices for 2008. World nickel prices have averaged $17.66/lb so far this year. - more

  Nickel/Mining/Stainless News

• Indonesia - PT Aneka Tambang, Indonesia's second- largest nickel-mining company by market value, expects output to rise 6.3 percent next year, less than some analysts had forecast. The stock fell by the most in more than six weeks. - more
• Indonesia - Nickel miner PT International Nickel Indonesia (Inco) said Tuesday it will shortly resume the construction of its 280 million US dollar Karebbe hydroelectric project in South Sulawesi following approval from its board of commissioners. - more
• India - The Indian government will consider changing its policy if that would help optimum utilization of iron ore resources of the country, said a senior government official. - more
• Brazil - It is too early in the negotiation process to tell where iron ore prices will be headed for 2008, a top executive for Brazilian mining giant Companhia Vale do Rio Doce (RIO) said Wednesday. - more
• New Caledonia - (courtesy/copyright Elsevier Engineering Information) Goro Nickel has awarded Lanxess a large contract for the supply of ion exchange resins for use in the production of nickel in New Caledonia. Reserves there of 120 M tonnes will supply plants with capacity of 60,000 tonnes/y for 30 years. The mine will be developed from 2009. Lanxess' Lewatit line of ion exchange resins are used to separate off small amounts of other metals.
• Thailand - Thainox Stainless (INOX) is expected to see a revival after the slump in steel price, after Posco in Korea boosts prices of 300 series stainless hot-rolled sheets by KRW300,000 or 8.6% to KRW3.8mn/tonne ($4,155/tonne). - more

  US Stainless Steel Surcharge Update

• AK Steel has updated their November stainless surcharge here
• If you are interested in making your own charts for a presentation or research, we keep updated info in excel format here
• Average prices for September 2007 - nickel at $13.398/lb , Chrome at $1.3275/lb , Molybdenum at $31.60/lb , Iron $320/GT

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

• Indications at 7:55 am CST show 3 month nickel selling up by  $.54/lb .  Either the rumor floating around yesterday about massive inbound shipments of nickel into LME warehouses have been debunked, or the second day of minimal LME inventory change has boosted traders morale. Nickel shot straight up from the get-go this morning and has yet to look back.
• Bloomberg - more
• Reuters - more

  Surcharges/ Reports

• Allegheny Ludlum and North American (here) released surcharges for November stainless steel, and as feared, they rose. AK Steel has yet to publish. Current updated list here 
• Reuters Metal Weekly - pdf
• Commonwealth Bank - The HARD Line "Nickel - Back from the Brink?" - pdf
• Commonwealth Bank - The HARD review - pdf

  Analysis/Forecast/Reports

• Analysis - Economists are eyeing a strong near-term outlook for commodity markets as the final quarter of the year begins, but highlight several headwinds as fallout from the crisis in global credit markets unfolds. - more
• Finland - Nickel prices dominated last week's MB/SMR Stainless Steel Summit in Helsinki. They have halved since May, but is the stainless industry happy? Not a bit of it. - more
• Courtesy/copyright Dow Jones Newswire - "LME nickel's strong rebound Tuesday tends to suggest that it has formed a base around and below the $30,000/ton level "and the fact yesterday's test of support held, means that it may well start to head higher," says analyst Will Adams"

  Nickel/Stainless News

• China - According to the contract, SRMI will provide nickel mines for Tanghe International to explore and develop, and then, the latter will provide the iron ore for Tangshan Iron & Steel to process and produce stainless steel products.
• Indonesia - But nickel is the main business of the company whose sales revenue more than quadrupled to 4.1 trillion rupiah ($451.1 million) - Indonesian state-owned miner PT Aneka Tambang plans to reduce its dependence on nickel and step up its gold and bauxite business in coming years, a senior company official said. - more
• Philippines - Less than two years after it started operating, a nickel mining firm based in Barangay La Fraternidad here shut down, citing financial difficulties owing to the reported drop in the price of nickel in the world market. - more
• New Caledonia - Legal proceedings against X were launched by the parquet floor in the business of the market of the air-conditioners concluded between the company Spot and Goro Nickel. An examining magistrate was appointed in this file where Philippe Gomès is concerned. - more
• Canada - The inaugural Asia Pacific Forum on Mining and Minerals wrapped up in Vancouver today with a discussion of the challenges, risks and opportunities facing the global mining industry. - more
• MEPS - UK based MEPS said that “In the flat products sector, we forecast an upturn in selling values over the next six or seven months. The import threat is receding and volumes are expected to drop significantly providing opportunities for the domestic mills to capture a much greater share of the slightly weakening consumption. - more
• Australia - BHP Billiton has threatened to sell some of its expanded iron ore production on the spot market if Asian steelmakers refuse to meet its demand to pay a freight premium in future long-term contracts. - more
• China - An alloy surcharges system is expected to be introduced into the stainless steel sector as early as January of next year, a consensus achieved at a recent meeting of Chinese leading stainless producers. - more

  Today's beginning nickel inventory

• London Metal Exchange - plus 54 tons = 32,964 tonnes (2.97% - 978 tonnes cancelled warrants/ 31,986 net stock level)
• Shanghai Jinchuan nickel - markets closed this week

• Today's official LME nickel closing prices - cash - $13.65 3 month buyer - $13.77/lb  (9.65% lower than 1/1/07)
• Baltic Dry Index - plus 29 to 9,566.
• LME nickel inventories - minus 24 tonnes from Rotterdam, Netherlands warehouse (rumors afloat in London of some 'major' shipments inbound per Dow Jones Newswire)
• News was rather quiet after our morning update. Noted this morning that Mr Chen, chairman of Taigang Stainless Steel Co, told reporters that the global demand for stainless steel products is on quick increase without a substitute in store. This kind of news encouraged nickel traders, and even with rumors floating around the LME exchange that there was some big shipments of nickel inbound to LME warehouses, helped squeeze the trading price of nickel higher today. We figured with China out of the game this week, that trading should be quiet, and so far, the market hasn't disappointed. Three month nickel ended the days trading at $13.93/lb ($30,700/tonne)    
• Dow Jones Closing Metals Report - more

  Forecast

• Investors looking to cash in on the base metals market should look to the long term future and forget about trying to trade on the spot price, Kevin Norrish, Barclays Capital research director, told delegates at a London conference. - more

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

• Indications at 7:55 am CST show 3 month nickel selling up by $.11/lb . Physical inventory actually retreated today, a rarity in recent weeks, although according to Dow Jones (below) there are rumors afloat of more inbound on the way.
• Bloomberg - more
• Reuters - more

  Analysis/Forecasts/Reports

• MEPS - Stainless Steel Price Revival Expected Towards End of 2007 or Early 2008 - more
• Dow Jones - Market talk that a nickel shipment of between 3000-6000 metric tons is to arrive in European warehouses shortly has been weighing on LME nickel prices, says a LME broker.
• Canada - Commodity Price Update - pdf here
• USA - Behre Dolbear Global Mining News - pdf here
• Forecast - Commodity prices look set to weather current economic turmoil as Asian demand outweighs any bouts of turbulence over the next ten years, analysts at a conference said today. - more

 Stainless Steel News

• Brazil - Sergio Mendes, the business and service manager of Brazil Acesita, said that the stainless steel demand in Brazil and South America shows a 6 percent increase year-on-year and this upward trend is predicted to last till year 2011. - more
• China - According to Mr Chen Chuanping chairman of Taigang Stainless Steel Co. said that the company is planning 7.5 million tonnes iron concentrate and 5 million tonnes steel capacity project. Mr Chen said that the global demand for stainless steel products is on quick increase without a substitute in store. - more

  Market/Industry News

• China - China would be unlikely to avoid the impact of a contraction in the U.S. economy because it remains still heavily dependent on fixed-asset investment and a thriving export market, David Humphreys, chief economist Norilsk Nickel (GMKN.RS) said Tuesday. - more
• Australia - Global miner BHP Billiton Ltd. (BHP.AU) said Tuesday that it will renew efforts to recoup a location premium for its Australian iron ore exports to China, a move that may anger Chinese steel mills ahead of annual price talks later this month. - more
• Australia - The minerals industry has begun a recruitment drive for 27,000 skilled tradespeople in southern industrial hubs. - more
• China - China steel product import from different countries in January to August 2007 totaled 5,405.189 million tonnes. Its imports during August 2007 amounted to 702.346 million tonnes. - more
• Brazil - Brazil exported 22.79 million tonnes of iron ore in September, up nearly 11 percent from 20.55 million tonnes in the same month of 2006, the trade ministry said on Monday.- more
• USA - September Manufacturing ISM Report On Business®; PMI at 52% - more

  Courtesy Citigroup 9/28 report

  Today's beginning nickel inventory

• London Metal Exchange - minus 24 tons = 32,910 tonnes (2.50% - 822 tonnes cancelled warrants/ 32,088 net stock level)
• Shanghai Jinchuan nickel - markets closed this week

• Today's official LME nickel closing prices - cash - $13.52/lb 3 month buyer - $13.71/lb  (10.14% lower than 1/1/07)
• Baltic Dry Index - plus 63 to 9,537.
• LME nickel inventories - plus 324 tonnes into Rotterdam, Netherlands warehouse, plus 180 tonnes shipped into Singapore, minus 12 tonnes shipped from Busan, South Korea
• Nickel inventories continued to rise, and much of the morning, nickel traded lower. But by days end, the price recovered and for the first day of the final quarter of 2007, 3 month nickel ended trading at $13.81/lb ($30,450/tonne)   
• Dow Jones Closing Metals Report - more here

  Comment

• From 1990 thru 2005, the average annual price of nickel was $3.64. Its most recent record peak came on May 9th of this year, when 3 month nickel traded momentarily for $23.50/lb. After a surprising LME rule change, the trading price began to fall, soon compounded by a slowdown in stainless steel production, a predictable course of action when nickel prices are southbound. The slump ended on August 16th, when trading would slip under $25,000/tonne in two days of trading, and for the last six weeks, has traded in the $25-$33,000/tonne range ($12-$15/lb range). So is the bull market over? We would answer that by referring you back to the first sentence of this comment. At $12 a pound, nickel is still well into a bull market. And there really is no reason to believe it will turn bearish anytime soon. In fact, even with nickel inventories still growing, an important barometer of worldwide demand, or the lack thereof, there is good reason to believe that stainless steel production will be picking up soon, if it hasn't already started. If we go back to the first few months of this year, the exaggerated increases in the cost of nickel, the single most costly ingredient in the most popular grade of austenite stainless, was having only a minor detrimental effect on stainless steel production. Users weren't happy about the increasing prices, but they were, for the most part, still buying. But when the price of nickel began to fall, producers and distributors brought their nickel purchases to a screeching halt, in anticipation of a better cost down the road. We have seen the market re-establish a floor, and even seen some climb in recent weeks. Now, with inventories very low, and the traditional busy season beginning in many parts of the world, it appears the time is right for a renewal of stainless production. When it happens, it will be interesting to see what prices will do. We predicted earlier that we felt the market would trade in the $12 to $16/lb range. We based these prices with two things in mind - a renewal of stainless steel production and the production of the so-called "pig-nickel" would keep the market honest. In the last few weeks, we have yet to see clear evidence of any major increase in production, and we have seen no change in the price of low grade laterite ore stockpiled on China docks. But we have seen the price of nickel jump back up to $15/lb. Based upon these two facts alone, we suddenly find ourselves questioning whether our high-side $16/lb forecast, may turn out to be too low.

  News/Analysis

• USA - United Parcel Service Inc. and the International Brotherhood of Teamsters have come to a tentative agreement on a new five-year national contract. - more
• India - Nickel cathode spurted up by Rs 10 per kg on sustained heavy industrial users demand. Trading in metal market will remained officially closed tomorrow for Gandhi Jayanti, traders added. - more
• Russia - Russian metals tycoon Vladimir Potanin has agreed to buy out the stake of his partner, Mikhail Prokhorov, in their common Interros holding company, the two sides said in a statement on Monday. - more
• Commentary - China is already the world's biggest consumer of copper, nickel and zinc. In short, demand for commodities is increasing at a rapid rate and supply is not keeping up. - more
• Analysis - The entire base metals complex including Copper, Zinc, Nickel, Lead, Tin etc has seen increased investor participation driven by the China story and the tremendous growth registered by the growth economies of India, Brazil etc. - more
• Analysis - MetalsWatch! Newsletter October 2007 - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.10/lb Nickel has been floundering early, looking for a clear direction among traders.
• Bloomberg - more
• Reuters - more

  Forecasts/Reports

• Courtesy/copyright Dow Jones - LME nickel is under pressure after "dropping like a brick" Friday and looks set to test further technical support, a London broker says. Immediate support is at $25,000 a metric ton, he notes, and while this limits the downside rising inventories could encourage further selling.
• Haywood Securities Metals & Mining Weekly - pdf here

  Western World News

• EU - An industry trade body is poised to file a complaint to the European Union that a surge in imports has been unfairly fuelled by Chinese government subsidies. - more

  Asian News

• Philippines - Less than two years after it started operating, a nickel mining firm based in Barangay La Fraternidad here shut down, citing financial difficulties owing to the reported drop in the price of nickel in the world market. - more
• South Korea - Posco, Asia's third-biggest steelmaker, will increase its stainless steel product prices by as much as 8.6 percent later this month because of rising nickel costs. - more  
• China - China's stainless steel mills have decided to raise the price in October, and the major mills include Baosteel, Lianzhong, Qingdao Pohang, Taiyuan Iron & Steel, Zhangjiagang Pohang and Gansu Jiuquan Steel. - more
• China - Taigang Stainless projects to have 7.5 million tonnes per year ironSecurities Daily's quoted Mr Chen Chuanping chairman of Taigang Stainless Steel Co during a shareholders meeting held in Taiyuan as saying that Chuanping expressed optimistic forecasting toward future development and disclosed the company is planning 7.5 million tonnes iron concentrate and 5 million tonnes steel capacity project. - more
• China - Chinese steel export prices continue to witness downward adjustments on concern the probable increase in export tariff rate would further dampen steel exports, which in turn would direct more cargo back to domestic markets. - more
• Japan - Sumitomo Metal Mining Co, Japan`s largest nickel producer, plans to raise electrolytic nickel output by 1.3% in the October-to-March period from a year earlier. - more

  Today's beginning nickel inventory

• London Metal Exchange - plus 492 tons = 32,934 tonnes (2.40% - 792 tonnes cancelled warrants/ 32,142 net stock level)
• Shanghai Jinchuan nickel - markets closed this week

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All prices, unless marked official closing prices, are indications only of LME 3 month buyer traded prices and courtesy newswire services. To understand what our prices mean, see "A Guide To LME Trading"...pdf here or "The ABCs of a Metals Exchange" ...pdf here (Molybdenum prices are for molybdenum oxide, an ingredient and major price factor in 316 stainless) (all ton listings are metric tons = 2204.6 pounds ) Updated daily before 8 am CST and before 1 pm CST weekdays, with some weekend updates - Disclaimer Original content and opinions copyright www.estainlesssteel.com