Monday, January 5

• Baltic Dry Index - minus 1 to 772. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Stocks in U.S. Drop on Earnings Concern; AT&T, JPMorgan Chase Shares Fall // Ford, Honda December U.S. Sales Slump More Than 30% as Consumers Retrench // Pequot's Wien Sees 33% Gain in S&P This Year, Rallies in Crude Oil, Gold // Asian Stocks Climb for Eighth Day on Government Stimulus; Nintendo Gains // Honda, Toyota Lead Decline in Japan Vehicle Sales as Recession Cuts Demand // Dollar Rises to Three-Week High Versus Euro on Prospects for U.S. Stimulus // European Stocks Advance for Fifth Day; Nestle, EADS, Xstrata Shares Climb // German Government Considering Two-Year Stimulus Plan Totaling $68 Billion (AP) Construction spending falls less than expected (WSJ) Japan's Auto Sales Skid to 34-Year Low
• The US Dollar maintained its earlier gains against the Euro, and is still trading 2-3/4% higher. Crude oil has had a volatile day, with trades ranging from $45.55 to $48.50/barrel and is currently trading around $47.50. Metals, except for platinum and zinc, ended, or are trading lower. Nickel had a volatile day as well, with session trading dipping by early afternoon, and then recovering. Dow Jones reports three month nickel ended the day at $5.83/lb . News that Jinchuan was increasing nickel production despite the low price, and the rising dollar helped handcuff nickel traders today, but we don't expect the bulls of last week to disappear completely. Sucden's day old chart shows the recent speculation the commodity indexes re-weightings have brought to nickel trading (chart here). LME inventory changes were positive, albeit a non factor today, and the Baltic Dry Index has drifted so far this year, with a combined change over two days totalling 2 points.  

  Reports

• Weekly Commodity Price Report - pdf here
• Weekly Forecast by SMM Specialist - here
• Weekly Outlook - pdf here

  Commodity/Economic Comments

• (Dow Jones) Market observers said copper and other metals may resume their rally in coming days because of the annual commodity indexes re-weightings, although all agreed fundamentals remained dire.
• (China Business News) - Mr Qi Xiangdong deputy GS of China Iron & Steel Association - "Domestic steel prices have fallen to 1994 levels and the chill winter implies the market warming up is not far."
• (Dow Jones) The European Union widened its steel trade deficit in tonnage terms during the third quarter compared with the previous quarter as Chinese steel imports more than doubled, figures provided by U.K.-based Iron and Steel Statistics Bureau Ltd. showed Monday.
• (Wall Street Journal) - The current U.S. recession, with no end in sight, threatens to be the longest since 1933, and that helps explain why investors are having so much trouble gauging the stock market. ... Since the Great Depression, only two recessions have run longer than this one, the first ending in 1975 and the other in 1982. Each lasted 16 months, according to the National Bureau of Economic Research, the government-designated recession tracker.”
• (Dow Jones) Monthly Chinese mill steel exports fell in November to their lowest level since June 2005 while imports dropped to their lowest level since February 2000, the U.K.-based Iron and Steel Statistics Bureau Ltd said Monday.
• (RTT) Cotton & Western Mining says iron ore price is now down to near 2004 annual fixed contact price
• Labour talks continue as strike threatens B.C. ports - more

  According to AK Steel's monthly surcharge report, nickel averaged $4.3937/lb in December ($4.85/lb in November), molybdenum averaged $9.60/lb ($10.00/lb in November), chrome averaged $1.032/lb ($1.54/lb in November), and iron averaged $235/GT ($145/Gt in November) in December. You can compare these figures over time on our excel spreadsheet here, and check historical surcharges here

• AK Steel Announces February 2009 Surcharges for Electrical and Stainless Steels - AK Steel has advised its customers that a $165 per ton surcharge will be added to invoices for electrical steel products shipped in February 2009. - more

  Asia top nickel producer Jinchuan to increase output in 2009 despite dull market - Jinchuan Group Ltd. (JNMC), Asia's largest nickel producer located in Gansu province, northwest China, announced Sunday that it would expand its production scale so as to lower costs in 2009, in spite of the dull nickel and copper market. - more

  A debt of $34 billion  - A debt of $34 billion to the state court in the accounts of New Caledonia, and in the greatest silence, for years. Born of a change in taxation of nickel occurred in 1975, this sum is heavy today challenged by local politicians. - translated version here (original French here)

  London Metal Exchange Trading Jumps to Record in 2008 - The London Metal Exchange, the world’s largest copper market, said trading rose 22 percent last year for a fourth consecutive record, paced by nickel and lead. - more

  Cuba Nickel Strong, Competitive - The Cuban nickel industry in 2008 upstaged the tourism sector with 70,400 tons mined for returns of 5.5 billion dollars. - more

  Rio Tinto restarts Australian iron ore mines - World No. 2 iron ore miner Rio Tinto Ltd/Plc is restarting its iron ore mines in western Australia after a two-week closure to cut production by about 10 percent due to lower demand from steel mills in China. - more

  December steel prices indicate that the market may have reached rock bottom in November. - The price of steel last month showed an increase for the first time since it plummeted in July. - more

  Eskom says smelter shutdowns caused large tumble in power demand - South African utility company Eskom said Monday that the shutdown of smelters through the credit crunch has caused power demand by the country's biggest users to tumble - but the national power generator still can't say when full power will be given back to the mines. - more

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

• Indicators at 7:50 am CST show 3 month nickel trading around $.16/lb lower with news that China nickel producer Jinchuan will increase nickel production despite lower prices. This has offset news that the Chinese PMI rose slightly in December, and forced some traders to take some profits from the recent price rise.  Indicator charts show nickel is currently off session lows though.  Metals, both precious and base, are trading lower this morning, as the Dollar makes a big morning jump on the Euro, currently trading 2-1/2% higher. Crude oil is also trading lower, down nearly 3% and just under $46/barrel. Overnight, Asian markets ended solidly higher, while European markets are higher, but without as much as enthusiasm. US futures show a slightly lower opening.   
• Bloomberg morning metal news - more

  LME nickel falls almost 5 pct on China output rise - London Metal Exchange nickel fell 4.9 percent on Monday, sliding after China's Jinchuan said it planned to boost metal output by almost 20 percent this year, despite soft market conditions. - more

  Nickel Gains Most Since 1987 in London on Index Speculation - Nickel gained the most since at least 1987 in London on speculation index funds will buy more industrial metals this month to reflect annual re-weightings in their benchmarks. Zinc and copper also advanced. - more

  Reports

• Metals & Mining Weekly - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices soared again on Friday in very thin market conditions and on continued speculation about index rebalancing. Nickel took the lead, jumping by almost 16%, while copper and tin were also very strong, rising by about 8% on the day. ... Despite a possible upside bias in metals over the course of the week (notwithstanding today’s rather sluggish opening), it is difficult to get too excited about prospects going forward, and the best we can hope for, is for a trading range to replace the relentless bear trend evident in most complexes. We say this in view of the fact that the US economy has yet to turn the corner, in that consumer spending, labor markets, corporate earnings, and manufacturing activity, are all moribund. In addition, while interest rates and credit spreads are heading lower, there seems to be no noticeable improvement in loan activity, not that surprising given that we seem to be falling further into recession. Not helping matters much either, is the fact that the slowdown in the US is not being offset by growth in other global economies. Instead, as we have been noting in our commentary, and as the Wall Street Journal chart reproduced in our attachment also shows, global economies are dovetailing the US slowdown, thus robbing the metals sector of non-US demand. ... We are currently at $12,375, down $825, and giving up a good portion of Friday's gains. A story out overnight, that Jinchuan Group plans to increase output of nickel, copper, and cobalt in 2009, did not sit well with the market today, and is contributing to the current decline. Jinchuan expects to produce 125,000 tons of nickel this year, up nearly 20% from the 104,600 tons produced in 2008. Nevertheless, we still expect nickel to do slightly better from here, before it fades and would not rule out an advance to just under $14,000, the topside of a 2 1/2 month trading range." (read Ed Meir's complete morning base metals report here)
• (Interfax) China's Ministry of Commerce and the General Administration of Customs jointly announced on Dec. 31 that China will reinstate copper, nickel, cobalt and aluminum tolling on Feb. 1, 2009, in order to boost the country's foreign trade growth.
• China to resume tax-free policy on copper, nickel, aluminium - China will resume a tax-free policy on imports of concentrate for copper, nickel and cobalt from Feb 1, a statement on the Ministry of Commerce's website said. (www.mofcom.gov.cn) - more
• (Yieh) China Metal Material Circulation Association said that China's stainless steel output reached 7.1 million tonnes in 2008, down by 6% YoY in comparison to 2007.
• Xinhua - Jinchuan Group Ltd, China's top nickel producer, said it plans to increase output of nickel, copper and cobalt in 2009, despite a weakening global economy. Jinchuan expects to produce 125,000 tonnes of nickel this year, up nearly 20 percent from 104,600 tonnes in 2008, a statement on the company's website (www.jnmc.com) said.
• Expert Commodity Picks for 2009: Jim Rogers and Marc Faber - more
• Base metals may remain volatile - more
• Global metal prices expected to firm - more
• Falling metals prices will hit Africa hard - more

  Tumultuous year for nickel - Nickel prices plummet, workers laid off, mines shuttered - more

  Nickel trade lackluster in Asia despite LME prices rising 30% - Nickel trading activities were lackluster in Asia Monday despite London Metal Exchange nickel prices rising 30% last week, South Korean and Japanese market sources said. - more

  Japanese base metal producers raise list prices on LME gains - Japanese base metal producers raised domestic list prices effective Monday following the rise in the London Metal Exchange prices over the Japanese new year holiday period last week. - more

  Domestic Price Of Ni-Based Stainless Scrap Passes Over To New Year On Yen 70,000 - 75,000 / Ton = Owing To Reduced Production Of Stainless Steel, Demand For Purchases Of This Scrap Has Been Still Depressed - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Jan 5 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Weekend Brief, January 4

  Reports

• Chart Store Weekly Scoreboard - pdf here
• Chart Store Monthly Scoreboard - pdf here

  Commodity/Economic Comments

• (MySteel) It is reported that more steel mills have returned to the market in light of the reviving demand bolstered by the stimulus packages released by the central government. .. Statistics shows that 19 steel manufacturers have declared to carry out maintenance in September and the number increased to 28 in October then falls to 27 in November. News learned that 5 steel mills have resumed their production lines in December including Tiantie Chongli Steel Making Company, Jiugang Hongxing, Lingyuan Steel, Pangang and Fujian Sanming Steel. Tiantie Steelmaking Plant aims to run at full capacity in next Jan.
• Price slump iterates end of mining boom - more

  Nickel sees strong rally - Nickel rallied strongly this week on expectation of greater demand from steel companies, for which it forms a key raw material. The industrial metal gaining weightage in a popular international commodity index basket also triggered enhanced investor interest. here was also technical buying coming at low levels, said the analysts. - more

• AISSIA against on anti-dumping duty on stainless steel - All India Stainless Steel Industries Association (AISSIA) has urged the Government not to impose the proposed additional 20 per cent anti-dumping duty on any cold roll stainless steel. - more
• Steel producers to give discounts instead of slashing prices - Domestic steel producers are looking at giving discounts of up to Rs 1,500/tonne on certain steel products to selected customers instead of slashing prices of all the products this month. - more
• Call for Increased Steel Tariffs - Managing director of Isfahan Steel Mill called for increasing steel import tariffs in light of reduced demand and falling prices in world markets. - more

  Global Steel Production & Pricing Under Pressure Through 1H'09  - According to Fitch Ratings' 2009 global steel outlook report issued today, Fitch expects the current sharp contraction in steel demand to continue to weigh on steel production and pricing through the first half of 2009. - more

  Iron ore spot market pricing starts the new year on stable note - Imported Chinese iron ore spot prices started the year on a steady note, as trading was minimal with many traders still out on vacation. As such, the Platts reference price of 62/62% Fe-content iron ore fines was unchanged at $70/dry metric ton CFR North China. - more

• Chinese steel exports to major destinations - chart
• Chinalco: China resource industry sees opportunity amid global crisis - Some Chinese mineral giants see the global economic slowdown as a blessing in disguise. - more
• Analysts see sluggish Chinese market despite price rebound - Xinhua.net reported that domestic large mills including Baosteel have lifted their ex work prices for next February alongside the rebounding market prices and the moves have helped restore market confidence. - more

  US steel industry on brink of collapse - The US steel industry is in collapse and looking for a massive government investment program of up to $US1 trillion ($A1.42 trillion) to stimulate demand for the key commodity, a report said on Friday. - more

• Post-production metal prices driven down - At least the scrap metal coming out of the presses at Jagemann Stamping still has some worth. - more

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