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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
 Posted - 06/13/2007 : 18:19:47
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Zimbabwe's gold output may plunge further
Zimbabwe’s gold output, which fell to a record eight metric tonnes for the twelve months ended March 2007, might sink further if miners working in the country continue to face operational constraints while those closed are not allowed to re-open, the country's independent Chamber of Mines has warned.
Author: Tawanda Karombo
Posted: Wednesday , 13 Jun 2007
HARARE -
Speaking to Mineweb, Jack Murehwa, president of the Zimbabwe Chamber of Mines (ZCM) has said that Zimbabwe's gold miners, who are owed in "excess of USD20 million, some of them since November last year" might register another slump in gold production.
Murehwa said miners in Zimbabwe are increasingly failing to secure inputs for the processing of gold ore.
"The reason being that as mines continue to fail to secure inputs required in the processing of gold ore, mainly cyanide, they may be forced to close their processing plans and therefore fail to produce any gold for sale."
He highlighted that gold output for the current quarter will be affected by such issues: "In simple terms, gold output in the immediate short term may fall because of curtailed production due to lack of inputs without the requisite revenue," he said.
He also bemoaned the closure of some gold miners during the Zimbabwe government's controversial blitz on what it termed "illegal mining operation". He however said that the prospects of such miners resuming operations remained positive.
"The chances of getting legal operations back into operation remain good. The closure of these legal operations obviously contributed to the reduced deliveries of gold to Fidelity Printers."
The Chamber of Mines, Murehwa said, had for some time been awaiting and urging for the finalisation of the Indigenisation and Empowerment Bill, which is currently before the country's parliament. The legislation seeks to empower government to grab a 51 percent shareholding of all mining firms operational in Zimbabwe and give it to "black indigenous Zimbabweans".
The delay in finalizing the legislation, which is expected to come into effect by the end of this year, "has meant that investors already in the country remain apprehensive about how the whole process will pan out" and affect them.
Murehwa added that several "new investors (would) rather wait for the end of the process before committing their funds" to Zimbabwe's mining sector.
Zimbabwe remains the only country yet to gain on high global mineral prices. "Our industry continues to experience declines in volumes despite the very buoyant mineral prices which prevailed for the past 18 months," Murehwa said in a recent interview.
Power outages and an exodus of most of the country's skilled mining personnel for greener pastures in other countries are the other reasons cited for the unprecedented tumble in gold production. He said despite the high world prices, investors in mining stayed away from Zimbabwe.
The country's largest gold producer Metallon Gold Zimbabwe is understood to be currently operating way below capacity owing to cyanide unavailability. Although the chemical is available on the market a tonne costs over Zim$110 million while its relatively cheaper in US dollar terms at US$2,000 per tonne.
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Credit Suisse forecasts gold testing $700/oz, along with continuance of base metals corrections
In a recently published analysis, Credit Suisse cited sound fundamentals, including new gold ETF investment, should help gold test $700/oz. However, their outlook for base metals prices is bleaker, at least until the fourth quarter of 2007.
Author: Dorothy Kosich
Posted: Wednesday , 13 Jun 2007
RENO, NV -
Credit Suisse declared that "gold and silver prices are back on the road to recovery"-- perhaps even testing US$700/oz this year--while base metals price corrections should continue for awhile.
In a recent analysis commodity analysts Tobias Merath and Eliance Tanner said gold recovery is "warranted by sound fundamentals" including new investment in gold ETFs and encouraging signs in the physical market.
Noting that the correlation between gold and silver has increased to a factor of more than 0.8 in recent months, Merath and Tanner suggested that "silver prices should also reap benefits from the upbeat outlook for gold." Credit Suisse recommended that investors who "believe that the return potential of a pure gold investment is too low should consider taking positions in a combination of gold and silver."
Credit Suisse's research revealed that a "negative market sentiment prevails" in base metals, predicting further declines in base metals prices. Nevertheless, they suggested that, as U.S. economic growth is anticipated to re-accelerate at the beginning of the fourth quarter, "the door to a favorable buying opportunity in the base metals sector will probably open up again at this point in time."
In the meantime, "investors in base metals should focus on those base metals markets that recorded a less pronounced surge during the strong rally from February to April and where the outlook for Chinese foreign-trade data is rather position," they recommended.
Credit Suisse suggested that zinc--whose prices turned in the worst performance of all base metals in recent month declining more than 11% since the beginning of the year-should, however, begin trading up to $3,800/tonne during the next three months as China has again become a net importer of zinc.
As of the close of business Tuesday on the LME, zinc stockpiles were reported at 71,250 tonnes at a price of $3,700/tonne.
Meanwhile, Reuters reported that LME nickel delivery in three months fell 6.4% to its lowest price ($39,000/tonne) since February 23. Reuters noted that a "significant sell-off in base metals" occurred last week due to the prospect of higher interest rates that could lower commodity demand.
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Metals shortages have a silver lining for investors
I have been reading two interesting publications this week. The first comes from Capital Economics and is called Global Inflation Watch. This is interesting mainly because of the title – who’d have thought even five years ago, when as far as most commentators were concerned rising prices were a thing of the past, that any research groups would ever bother to devote an entire 40-page report to worrying about the subject.
The second is the New Scientist, which pretty much sums up the reason why the price of almost everything is on the up with its headline: World Stripped Bare.
The basic premise here is that we are using up the world’s resources, and its minerals in particular, at a most alarming rate. If the world keeps consuming metals at its current rate we have a mere 45 years of gold left, 46 years of zinc, 29 years of silver and 59 years of uranium.
If the rest of the world catches up with America and starts consuming these minerals with the same enthusiasm, things look worse: there is only 19 years’ worth of uranium, less than 10 of silver, 36 of gold and 34 of zinc.
Silver investment: why this metal's looking attractive
The first thing these figures make me want to do is rush out and buy silver. The price of the metal has risen threefold since I first started writing about it here, having been told in 2001 that Bill Gates and Warren Buffett were pouring money into silver miners. It has already risen another 6% this year, but as these figures make clear the supply-and-demand situation is so tight that it is still worth owning.
Silver has a long history as a monetary metal and as a safe haven in difficult times so, given the inflationary environment around the world, it makes sense to hold it – along with gold – as a way of protecting your capital.
However, there is a lot more to the story than this. Unlike gold, silver is indispensable to a huge number of industrial processes. It has the highest thermal conductivity of all metals. It is very strong but also malleable and it can put up with extreme temperatures with no change in its properties.
It also has disinfectant attributes. Only last year there was talk of making NHS patients wear pyjamas with silver streaks running through them to try and stave off the MRSA super bug. Silver has always been considered to be good for health: rich babies aren’t said to have been born with silver spoons in their mouths for nothing.
Add all this to the fact that silver looks very pretty (despite my passion for investing in gold, I really only wear silver) and you’ve got the perfect metal.
It is used in computer keyboards, in mobile phones, washing machines, batteries, TVs, cameras, photography, medical devices and a large number of the other things you own. Look round you: every gadget you see will have a tiny bit of silver knocking about in it somewhere. Industrial demand for silver is forecast to rise at some 6% this year.
Silver investment: supply shortages
Herein lies the problem – and the opportunity. Like most perfect things, silver is in short supply.
Until recently this hasn’t been much of a problem as inventories have been high and government stockpiles have been there for the taking. No more. Most official stockpiles are all but gone – certainly sales from them have fallen off fast – and estimates suggest total stocks of refined silver are about 300m ounces, less than a seventh of what they were only a decade or so ago.
It is possible to recycle some silver, but most is lost for ever after use. To me this says that the silver price is going to keep rising for a while yet and that buying into it, probably via the iShares Silver exchange traded fund, is a good idea. Silver currently trades at about $14 per ounce. The real bulls think it will hit $20 by the end of the year.
Metals investment: others to watch
However, there are other metals that are in even scarcer supply. There is uranium, for starters. I am slowly coming round to the idea that at some point in the future wind and wave power may be of some use to us, but in the shorter term nuclear power looks like it is winning the battle. Bad news then that there may be only 19 years of uranium left.
Earlier this year I mentioned thorium. This relatively unknown heavy metal can be used to produce nuclear power in much the same way as uranium with the happy difference that its waste is much less radio-active, making it both easier and safer to dispose of. It is also much more plentiful than uranium and has a half-life of only 500 years rather than tens of thousands.
In Norway, Bergen Energy has already applied to build a thorium-based power plant. In February, I suggested buying shares in US-listed company Thorium Power, which is testing thorium in Russia and hopes to be using it commercially in the next three to four years. Those willing to take even more of a gamble might also look to the tiny UK-listed All Star Minerals, which has registered to explore for thorium in Sweden.
Finally note that a great number of other metals you have never really heard of are also in increasingly short supply. We’ve got practically no rhodium, which is vital for diesel catalytic converters, very little indium, used in flat-screen TVs, and only about 10 years of tantalum which you can find in all mobile phones. Supply is also tight for ruthenium used in computers, and molybdenum, a component in high-strength erosion-resistant steel.
You can get exposure to these metals through most of the big miners. Xstrata, which I hold, has a good position in the minor metals markets.
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Peruvian mega copper-moly-silver project snapped up by Chinese
The company controlling one of the world's largest porphyry copper deposits is the subject of an approved offer from one of China's biggest diversified mining and metals companies.
Author: Lawrence Williams
Posted: Monday , 11 Jun 2007
LONDON -
Perhaps not before time, one of the world's bigger copper/silver deposits is being bought via the high-profile junior mining company which has been proving up big extensions to the orebody. The project is at Toromocho, high in the Peruvian Andes, currently controlled by Peru Copper - a junior with a host of top mining engineers and explorationists on the Board, with tremendous experience of Andean mining and who recognised the potential of this giant sleeper.
The deposit is not new, nor did Peru Copper find it. It was one of the properties owned by Peruvian state mining company Centromin, which had taken over the old Cerro Corporation properties, and optioned it to Peru Copper four years ago as part of the country's privatisation process. Back in the 70s, when this writer visited the property with Centromin, there were strong hopes for it. Successful metallurgical testing had been undertaken on it, and a Centromin metallurgist told me the ore was very amenable to standard processing techniques with excellent recoveries. And, although the deposit is at an uncomfortably elevated altitude of between 4,700 and 4,900 m (14,760 ft and 16,000 ft) above sea level it is close to the Lima to La Oroya metalled road and railway line - the latter thought to be the highest standard gauge rail line in the world.
The basic deposit is huge with a recent ore reserve calculation of 1.375 billion tons of ore grading 0.51 percent copper, 7.06 grams per tonne silver and 0.018 percent molybdenum at a cutoff grade of 0.275 percent copper. There is also over 600 million tons of additional measured and indicated resource at a slightly lower grade. It's a copper porphyry type and Peru Copper has recently been drilling extensions to it so final tonnages may be well in excess of these.
The friendly takeover offer has come from Chinese aluminium producer Chinalco (the Aluminum Corporation of China) which is offering CAD$6.60 a share in cash for the company, valuing Peru Copper at approximately CAD$840 million. The Offer represents a premium of 21% to Peru Copper's 20-day volume weighted average trading price of $5.45 on the Toronto Stock Exchange ending on May 23, 2007, the last trading prior to the date on which the Company announced it had entered into an exclusivity agreement. The acquisition of the Peru Copper shares will be financed through Chinalco's cash on hand.
The Peru Copper Board of Directors has recommended the Chinalco offer unanimously.
In order to ensure that Peru Copper has adequate funds to advance the Toromocho Project in the near term, Chinalco has also agreed to invest C$70 million by subscribing for 13.2 million Peru Copper shares at a price of C$5.30 per share, representing an issue discount of 2.75% to Peru Copper's 20-day volume weighted average trading price of C$5.45 on the TSX ending on May 23, 2007. Following completion of the private placement, Chinalco will own approximately 9.9% of the then outstanding Peru Copper shares.
All of the directors and certain other shareholders representing approximately 34% of the outstanding Peru Copper shares (calculated on a fully-diluted basis) have entered into lock-up agreements with Chinalco under which they have agreed to, among other things, tender all their Peru Copper shares to the Offer.
Peru Copper's chairman and Andean porphyry copper expert, J David Lowell commented "Since November 2005, Peru Copper has been conducting a strategic review of the options available to the Company to maximize the value of the Toromocho Project. Having assessed all options available to the Company, we have concluded that Chinalco's offer is the best option available to our shareholders and to the Company. We are delighted that a company of the financial and technical strength of Chinalco is going to take the Toromocho Project to the next stage of its development."
Mr. Yaqing Xiao, President of Chinalco, said, "This is an important step in our strategic growth outside China and will provide us with an opportunity to leverage the strength of our balance sheet and our extensive project development expertise to advance the Toromocho Project. We look forward to identifying further investment opportunities in Peru and around the world."
The cost of bringing the mine to production at an ore mining rate of 150,000 tonnes a day was estimated at around US$1.5 billion, but Chinalco is likely to rework the calculations and perhaps the mining rate. The demands on men and machinery operating at such an altitude are severe though.
This is truly one of the great remaining Andean copper porphyries and it only had to be a matter of time before a major mining company took it on. The surprise perhaps is that it is a Chinese concern which appears to have won it - at least so far.
Formal docomeentation relating to the take-over bid is expected to be mailed by Chinalco in mid to late June 2007. The Offer will be open for acceptance for a period of not less than 35 days and will be conditional upon, among other things, valid acceptances of the Offer by Peru Copper shareholders owning not less than 66 2/3% of the outstanding Peru Copper shares (calculated on a fully-diluted basis). In addition, the Offer will be subject to certain customary conditions, relevant regulatory approvals and the absence of any material adverse change with respect to Peru Copper.
UBS Investment Bank is acting as financial advisor to Peru Copper and Cassels, Brock & Blackwell LLP is acting as legal counsel to Peru Copper. BMO Capital Markets is acting as financial advisor to Chinalco and McCarthy Tetrault LLP is acting as legal counsel to Chinalco.
Chinalco is the largest diversified metals and mining company in China. It is focused on the Chinese and international aluminium markets but also engages in resource exploration and down stream operations in the fields of aluminium, copper, rare metals and other non-ferrous metals.
Chinalco's largest asset is a 40.46% stake in Chalco, the largest producer of primary aluminum in China. The company is the second largest refiner of alumina and among the largest producers of primary aluminium in the world. It produced 3.0 million tons of aluminium and 9.2 million tons of alumina in 2006.
Chalco's shares trade on stock exchanges in New York, Hong Kong and Shanghai. The market value of Chalco's shares is approximately US$32 billion, making it one of China's largest publicly traded companies.
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DJ BASE METALS: Comex Copper Bounces Due To Strike Focus, Yields
By Allen Sykora
Of DOW JONES NEWSWIRES
Copper futures posted a gain Wednesday as traders turned their attention back to strike threats in several countries and also as Treasury yields backed down from early levels that were their strongest in roughly half a decade, traders and analysts said.
The most-active July copper contract rose 2.60 cents to settle at $3.3130 per pound on the Comex division of the New York Mercantile Exchange, after initially dipping to $3.2100, the lowest level since just ahead of Memorial Day weekend.
Catherine Virga, base-metals analyst with CPM Group, attributed some of the initial weakness to a continued reaction to a preliminary report on Chinese May copper imports released Tuesday. It showed that imports of copper and semi-finished copper products totaled 220,561 metric tons, down 28% from 304,672 in April.
"It was actually a little higher than some market expectations, but
nevertheless revealed some softening, because China is basically assumed to have a bulk of the restocking completed thus far," Virga said. "That gave us further selling earlier today.
"But because of a series of potential strikes in Mexico and Chile, prices are a little higher today."
Contract workers at Chile's Codelco have threatened to strike later this month, and there is a mid-month strike deadline for negotiations involving workers at several Grupo Mexico sites. On top of this, a strike began early this week at an Xstrata refinery near Montreal, and unionized workers at Southern Copper Corp in Peru voted Wednesday to support a strike.
A trader cited a downtick from the recent highs in Treasury yields as yet another supportive factor. This also helped U.S. equities rise, which often supports the metals.
The 10-year yield got as high as 5.33% early in the day, but since came back down to around 5.225% as copper was closing.
"As bond yields fall, some of the commodities are recovering here," said one trader.
Technically, it was constructive that copper was able to recover after taking out last week's low, said Scott Meyers, senior trading analyst with Pioneer Futures.
"The fact it made a lower low and rallied up is good," he said, suggesting this creates potential for the $3.35 to $3.40 area.
The futures held at $3.21 overnight. Below this, the main support traders have been citing is the May 24 and 25 lows of $3.1725 and $3.1650.
Virga puts support for three-months copper in London - which tends to lead Comex - around $7,000 a metric ton.
A key focus going forward, Virga said, will be Friday's weekly report on Shanghai Futures Exchange inventories.
"There has been less attention paid to LME inventories and much more attention paid to global stocks, due to the fact there seems to be so much transferring of the inventories recently," she explained.
Other analysts said the market will be looking toward U.S. inflation data the next two days to see how it affects recently stronger Treasury yields, which in turn has been impacting equities and metals.
The U.S. Producer Price Index is due out at 8:30 a.m. EDT Thursday (1230 GMT) and is forecast to be up 0.6% in May, or up 0.2% when excluding food and energy. First-time weekly jobless claims, due out at the same time, are forecast to be up 6,000 to 315,000.
Then on Friday, the market gets the May Consumer Price Index.
Inventories of copper stored in London Metal Exchange warehouses fell 450 metric tons Wednesday, leaving them at 119,875. The most recent Comex inventory data, released late Tuesday afternoon, were down 270 short tons at 25,843 short tons.
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Metals - Nickel comes back as stocks rally; other base metals continue lower - "Nickel came back from the sharp losses of recent days, albeit in modest fashion, as wider sentiment staged a tentative recovery ahead of an expected higher opening on Wall Street." - article here (by the time this was published, nickel had retraced its steps)
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DJ FOCUS: Nickel Faces Reality Of Substitution, Demand Erosion
By Lisa Yuriko Thomas
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--What goes up must come down. And after a stellar start to 2007, nickel prices are on their way down, facing the harsh consequences of consumers opting away from the expensive material toward cheaper alternatives.
Nickel-demand erosion from stainless steel producers - the largest consumer of nickel - has finally filtered into the market, easing the critical supply tightness that had pushed prices to record highs over the last few months. And in looking to the upcoming slower summer months, further price weakness is expected, said analysts.
"Nickel is very much a 'China play,' and as Chinese metal demand prospects get increasingly questioned, the complex will inevitably be under pressure," said metals analyst Edward Meir of Man Financial.
Nickel prices have been one of the largest benefactors of the commodities bull run, rising 150% in 2006 alone. The metal has jumped about 60% in the first half of 2007 but has retraced roughly 20% since hitting an all-time high of $51,800/ton on May 9.
At the same time, nickel inventories on the London Metal Exchange have increased sharply over the past few weeks and are now at their highest level in more than a year, analysts said.
...(yet wasn't the reason for the increase in inventories due to the forced hand over of nickel by big holders of nickel when LME changed the rules?)
On Tuesday, nickel stocks rose 42 tons to 8,922 tons, inching towards the psychologically important 10,000 ton level. Canceled warrants - or material to be drawn down at a later date - stood at 4.98% of total LME inventories Tuesday, "the lowest level for some considerable time," said Robin Bhar of UBS.
...(What is 8,922 Tons of nickel in terms of daily consumption? anybody knwo?)
Increasing signs of substitution, including the development of stainless steel grades that don't require nickel, as well as surging Chinese ferro-nickel production, means "nickel is no longer in a demand-rationing phase," said Jeffrey Currie of Goldman Sachs.
And stainless steel producers are signaling lower production levels for the summer months, leading to the recent build up in stocks that's been seen, said one New York based physical trader.
Stainless steel producers, particularly in Asia, have been at the forefront of efforts to find cheaper substitutes for nickel. Posco (PKX), the world's third-largest steelmaker by output, announced in April that it had developed an alternative to austenitic stainless steel that could be sold at half the cost.
In a statement, the South Korean company said it would begin selling 2,000 metric tons per month before increasing sales to 10,000 tons per month in 2008.
Low-nickel pig iron as a viable alternative to stainless steel has also cut into nickel demand. "China's production of low-nickel pig iron has grown at a hefty pace fueled by imports of nickel ores," said Kevin Norrish of Barclays Capital. Nickel laterite ore is processed into nickel pig iron but at a much lower nickel grade.
And the trend is expected to continue. "Our estimation is that nickel pig iron will remain attractive (to domestic stainless steel producers) unless the nickel price falls below $20,000," said Xu Aidong, a nickel analyst with state-owned metals research firm Antaike Information Development Co.
Meanwhile, adding to the nickel market's recent turmoil was an announcement last Thursday by the LME that it was amending its nickel lending guidance in hopes of preventing "disorderly" market activity, which has triggered a sell-off of 12% since the announcement.
...(How nice to know that the changing of the rules in mid course wasn't ignored, just played down as if it were a meaningless detail.)
"The trade remains very nervous after last week's intervention," one LME trader said.
The change in the rules effectively frees up more metal to the market by reducing the amount of nickel that market participants are allowed to control before they have to lend metal back to the market.
The exchange's new rules prevents two or three players from either colluding or working independently to hold the physical metal from the market, one London-based commodities analyst noted, whereas the previous rules were designed to prevent a single entity from holding a dominant position of the physical metal, the analyst added.
"The LME is constantly looking at all of our markets in hopes that trading activity in the market reflects an orderly market," said Anna Campopiano, director of communications at the LME. She wouldn't comment on speculation of market collusion between two or more market participants in the nickel market.
Some analysts, however, questioned the exchange's move in light of the rising LME stocks. Other analysts said the cash price remains very tight with more demand for physical metal than supply can currently meet.
Nevertheless,
the exchange's move has effectively taken the flare out of the market,
forcing prices to retrace "to (levels) where they should be," said the LME trader.
...("Should be" for whom?)
In addition, the amendment has reduced near-term tightness whereby the cash to three-month spread has fallen substantially.
The decreasing backwardation makes hedging less expensive and physical trading easier, said the New York physical trader. On the other hand, the easing backwardation will decrease the incentive for traders to deliver metal to the exchange as they are now able to roll their positions forward, said the LME trader.
Meanwhile, general weakness in the base metals markets has also added to nickel's price decline. The recent bout of risk aversion that helped send metals prices sharply lower late last week could stir further wobbles for nickel and the base metals complex over the near-term.
"There's risk reduction at the moment with many traders unwilling to take a position on the market," said one base metals trader.
A sell-off in Treasury products late last week meant a rise in the 10-year yield to around 5.25%, matching a five-year high. That boosted the U.S. dollar, which in turn put pressure on the metals complex.
Yields for U.S., E.U. and Japanese government bonds have been climbing steadily for the past month following stronger economic data and inflation fears, attracting investors away from riskier assets such as metals to bonds.
This has also prompted many investors to shift from thinking the U.S. Federal Reserve might cut interest rates to looking for rates to rise, a move which will constrict spending.
At 1735 GMT, nickel traded at $39,800/ton, down 6% from Monday and at a fresh three-month low.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly.
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/14/2007 : 19:00:32
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Indian SS demand to put pressure on world nickel market - CVRD - "Brazilian miner Companhia Vale do Rio Doce recently said that the tight nickel market could see increased pressure in the years ahead if Indian economy increases its use of the key stainless steelmaking ingredient."
The bulls are still running - "Prices for most industrial metals are well above historical levels for the second straight year. Analysts now believe supply tightness will keep prices higher for the rest of the year."
New Caledonia’s Goro project faces further delays, says analyst - "An Australian-based business analyst says he expects further delays and cost blow-outs for the New Caledonian Goro Nickel project."
European steelmakers raise stainless alloy surcharge for July - "Main European stainless steel markers have increased alloy surcharges on austenitic stainless steel for July deliveries."
Mining of certain resources to be banned in Tibet - "Amidst the recent heated debate on environmental and energy conservation, the local government of Tibet Autonomous Region (TAR) has decided to ban gold, mercury, arsenic and peat mining in order to make a greener contribution."
....(Less gold mined, more value for gold already above ground)
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ZINC WILL TRADE AT $3,800/TONNE IN 3 MONTHS
Credit Suisse forecasts gold testing $700/oz, along with continuance of base metals corrections
In a recently published analysis, Credit Suisse cited sound fundamentals, including new gold ETF investment, should help gold test $700/oz. However, their outlook for base metals prices is bleaker, at least until the fourth quarter of 2007.
Author: Dorothy Kosich
Posted: Wednesday , 13 Jun 2007
RENO, NV -
Credit Suisse declared that "gold and silver prices are back on the road to recovery"-- perhaps even testing US$700/oz this year--while base metals price corrections should continue for awhile.
In a recent analysis commodity analysts Tobias Merath and Eliance Tanner said gold recovery is "warranted by sound fundamentals" including new investment in gold ETFs and encouraging signs in the physical market.
Noting that the correlation between gold and silver has increased to a factor of more than 0.8 in recent months, Merath and Tanner suggested that "silver prices should also reap benefits from the upbeat outlook for gold." Credit Suisse recommended that investors who "believe that the return potential of a pure gold investment is too low should consider taking positions in a combination of gold and silver."
Credit Suisse's research revealed that a "negative market sentiment prevails" in base metals, predicting further declines in base metals prices. Nevertheless, they suggested that, as U.S. economic growth is anticipated to re-accelerate at the beginning of the fourth quarter, "the door to a favorable buying opportunity in the base metals sector will probably open up again at this point in time."
In the meantime, "investors in base metals should focus on those base metals markets that recorded a less pronounced surge during the strong rally from February to April and where the outlook for Chinese foreign-trade data is rather position," they recommended.
Credit Suisse suggested that zinc--whose prices turned in the worst performance of all base metals in recent month declining more than 11% since the beginning of the year-should, however, begin trading up to $3,800/tonne during the next three months as China has again become a net importer of zinc.
As of the close of business Tuesday on the LME, zinc stockpiles were reported at 71,250 tonnes at a price of $3,700/tonne.
Meanwhile, Reuters reported that LME nickel delivery in three months fell 6.4% to its lowest price ($39,000/tonne) since February 23. Reuters noted that a "significant sell-off in base metals" occurred last week due to the prospect of higher interest rates that could lower commodity demand.
.....(zinc going up? Maybe holding onto some of those zincolns is a good idea.)
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Switzerland to Sell 250 Tons of Gold
........(Expect gold prices to get knocked around in the near future)
BERN, Switzerland (AP) - The Swiss National Bank said Thursday it will sell 276 US tons of gold reserves over the next two years.
The sale would fetch about $5.2 billion (euro3.9 billion) at current prices.
The proceeds will be used to increase Switzerland's foreign currency reserves, national bank directorate member Thomas Jordan told reporters.
The share of gold in Switzerland's currency reserves has risen to 42 percent from 33 percent since mid-2005 due to the increase in gold prices. Jordan said the sale would return the share of gold in the currency reserves to their previous level.
The sale will occur at regular intervals over period of two years to minimize the impact on the gold market. Once completed, the national bank will hold 1,040 metric tons (1,146 US tons) of gold.
Between 2000 and 2005 Switzerland sold 1,300 metric tons (1,433 US tons) of surplus gold reserves. The proceeds -- about 21 billion Swiss francs -- were distributed between the federal government and the country's 26 cantons (states), who used the money to pay off debts.
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A bit old news, but could prove useful in the future/good to know.
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Metalico buys Tranzact, exotic metals scrap recycler
Metalico, Inc. (MEA) on Friday announced the purchase of Tranzact Corporation, a recycler of molybdenum, tantalum and tungsten scrap. Tranzact generated sales of approximately $25 million during each of the two previous years. Metalico expects that the acquisition will be accretive immediately.
Consideration for the purchase was provided by a combination of draws on Metalico's credit facilities and seller notes. Financial terms of the acquisition were not disclosed.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 06/15/2007 19:18:04 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/15/2007 : 19:28:44
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Summer seems to slam the metals prices.
Bad for the short term speculators who expect a quick buck,
Good for the nid-term to long term investor/speculator who can buy more for less and wait for the prices to go up in the future.
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China Preparing to Double Resource Taxes - "Central government authorities are preparing to double resource taxes covering oil, natural gas, coal and other mineral resources by changing the presently fixed tax rates to a percentage-based scheme that would take into account resource prices, a tax expert told Interfax today."
Japanese nickel scrap prices fall 30% - "Japanese nickel stainless steel scrap prices have plummeted by 30% in the last three weeks, local industry sources said on Thursday. Spot prices of nickel stainless scrap of 304 grade were quoted at Yen 370-400 ($3-3.2)/kg Thursday by scrap dealers in Tokyo and Nagoya cities, trade and stainless mill sources said." -
"China's largest nickel producer Jinchuan Group has lowered its domestic electrolytic nickel prices by Yuan 14,000 ($1,836)/mt, with effect from June 15, 2007, the company said Friday. This is the third time in June 2007 that the company has reduced its nickel prices. The company has lowered its nickel price by Yuan 13,000/mt, which was effected on June 9 and down Yuan 10,000/mt, which was effected on June 1, 2007."
Nickel ‘Chicken Littles’ say the sky is falling - "The sky is falling, the sky is falling. Or so it seems to the many metallic “Chicken Littles” out there highlighting the plummeting price of nickel. The shinny grayish-white metal hit a three month low on Tuesday briefly dipping to $39,800 per tonne (US) on the London Metal Exchange (LME) for delivery in three months."
Full story here
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!!!!!China may try to bypass exchanges and source materials directly -
"China is roaming the world to source metals directly from Africa and elsewhere in order to cut out such middleman as the London Metal Exchange (LME), says Martyn Davies, director at the Centre of Chinese Studies at Stellenbosch University in South Africa.
China is trying to avoid key commodity markets while it creates markets for Chinese exports."
Story here:
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...Seems like the US isn't the only one trying to reduce Chinese imports...Argentina sets 63% dumping tax on China's stainless steel pipe imports - "Argentina has implemented an 63 percent anti-dumping duty on welded austenitic stainless steel pipe imported from China through May 2012."
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/15/2007 : 19:36:04
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Global copper production is unlikely to cover booming demand during 2007, according to German copper producer Norddeutsche Affinerie, as reported in the NYMEX Direct subscription-only newsletter. “Although everything is being done worldwide to increase and expand copper production in view of the high prices, it will probably not suffice to cover the booming demand,” according to Europe's largest copper refiner, who has said demand for the metal will remain strong for years led by Asian countries such as China.
Copper has led the latest nonferrous pricing charge, rising 60% since February when China’s surging imports slowly began to be felt by the market. And even the more-bearish analysts who suggest the red-hot red-metal market may be due for a slight cool-down now believe the second quarter bull run isn’t over yet. J.P. Morgan Securities’ Commodity Strategist has moved the 2007 forecast for copper cathode to $2.96/lb, up from the earlier forecast of $2.55/lb. London Metal Exchange cathode averaged $3.06/lb last year, a record.
Bloomberg News reports that copper future prices rose in New York yesterday after sales at U.S. wholesalers increased at the fastest pace in 18 months, signaling demand may climb in the world's second-largest consumer of the metal. The 1.8% increase in March reflected rising demand for durable goods and suggests companies are making progress in limiting stockpiles built up last year, the U.S. Commerce Department said. Copper, used in wires and pipes, has gained 30% in price this year because of the global economic expansion.
On the supply side, recent “reports of production losses at mines and smelters were a recurrent theme and sparked considerable interest, since they provided information on how the market was tightening further,” Norddeutsche said, adding however the extent of production losses cannot yet be assessed. Konkola Copper Mines’ Zambian Nkana smelter had to close for maintenance in April and has lost some 4,000 metric tons of copper output. Strikes and protests added further supply concerns, including at Freeport McMoran’s Grasberg mine in Indonesia and the recent nationwide strike in Peru, Norddeutsche.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/19/2007 : 20:51:55
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File these stories under golden views or gilded opinions.
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WHAT'S THEIR LONG-TERM PLAN?
by Tim Iacono
June 19, 2007
Last week, the Bank of Switzerland announced that they plan to sell 250 tonnes of gold bullion into the market over the next two years. This comes shortly after news that the Bank of Spain had dumped more than 100 tonnes of the metal and word of additional sales by Belgium.
With the words "global inflation" on the lips of billions of people around the world and a rising price of gold sure confirmation of such, you have to wonder what the long-term plan is for Western central banks and their gold.
Do they plan to just keep selling the stuff until they have none left?
Why do they hold gold at all if it is simply a relic of some former, barbarous time - a metal that long ago lost its relevance in a world of advancing economic theory and practice?
So far this year, with each new press release detailing additional supply being pushed into the market, the gold price has taken another nose-dive only to trudge back up toward $700 an ounce, the level at which a line appears to have been drawn.
Like Gandalf to Balrog in the Mines of Moria, central bankers appear to be warning, "You shall not pass!"
Of course in the first Lord of the Rings movie, both Gandalf and Balrog took a perilous fall, Gandalf eventually gathering himself and averting disaster.
Will Western central bankers hold off their nemesis for a while longer and, if so, is it their intention to just stand there on the bridge indefinitely hoping that Balrog will get tired and walk away?
Balrog seems full of energy - not the type to tire easily.
Or, in the world of central banks and their gold, does Gandalf lose?
Surely their long-term plan can't be to continue to sell gold into the market indefinitely, keeping the price of the metal artificially low, until all their vaults are empty.
What will they do then when the price of gold continues to rise?
Raise interest rates to 20 percent?
With the amount of debt and leverage that has become commonplace in the world today?
Reality Check
As more and more of the world's citizens doubt their government's reporting of a "low inflation" world - as they see prices rising quickly around them, watch asset bubbles inflate, and hear of double-digit money supply growth - more and more of the world's citizens buy gold.
Like other commodities, the supply of gold is limited.
Unlike the paper and its electronic equivalent that spews from the global financial system at a dizzying rate, the supply of gold can not be increased with the push of a button on a computer keyboard.
That is why its value goes up.
The more the world's citizens buy gold, the higher the price goes, and the more that Western Central Banks are likely to sell - up to the point that they either decide to stop selling or they run out of gold.
Which will it be? When will it be?
Does anyone really think that this same discussion will be taking place ten years from now or fifty years from now?
Surely Western central bankers have some sort of a plan to keep the price of gold from making them look bad.
Don't they?
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GOLDEN FLEECED
by Rob Kirby
KirbyAnalytics.com
June 19, 2007
Over the past couple of weeks the gold market has been buffeted by VERY public announcements on the part of two countries [Spain and Switzerland] and their sales of gold bullion.
In the case of Spain, Spanish Finance Minister Pedro Solbes said,
"What we aim to do is to sell gold, an unprofitable asset, (?)to reinvest in bonds, which are more profitable," a Solbes spokeswoman quoted the minister as saying in answer to a question about the gold sales in a Senate hearing.
"The objective of our reserves is to maximize their profitability."
Funny thing though, with the price of gold having risen steadily since making generational lows of U.S. 286 bucks back in 1999 – anyone who has owned gold has profited. In fact, sovereign gold sales [or dumps, perhaps?] have INSTEAD tended to only have the following short-term effect on gold prices and hence returns:
So ask yourself, in a world where Central Banks around the world are expanding fiat money supplies at double-digit growth rates – is this picture [disposing of real stuff at reduced prices for ever-depreciating currency] consistent with maximization of profits?
In the case of Switzerland, just last week the Swiss National Bank pre-announced their intentions to sell 250 tonnes of gold [one fifth of their alleged holdings] between now and September 2009.
The Swiss announcement led to such disparaging [mainstream] gold-price-negative headlines as,
Swiss sales dash hopes of gold recovery
By Ambrose Evans-Pritchard
Last Updated: 3:14am BST 15/06/2007
Almost makes one believe that someone – somewhere – has it in for the price of gold, eh?
When one stops to consider the sage words of precious metals expert Jason Hommel – this becomes more than abundantly clear:
Swiss gold sales of 250 tonnes are worth $5 billion.
Swiss gold sales pale in size in comparison to the Bank of China's $1200 billion of reserves. China hopes to diversify 5% of that into gold, which is $60 billion. Where is China going to get $60 billion worth of gold, or about 2871 tonnes?
This remains the unanswered question in the gold market.
So who could possibly have it in for the price of a strategic commodity like gold and why? A bit of sleuthing turns up a few clues.
The article ...here
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from an insider’s perspective, exactly what led to the collapse of the Soviet Union. I have dealt with this topic before in an essay titled, Moscow On The Hudson, where I detailed exactly how declining oil and gold revenue in the 1980’s was DIRECTLY responsible for the collapse of the former Soviet Empire.
Author Yegor Gaidar [director of the Institute for Economies in Transition in Moscow. Between 1991 and 1994, he was acting prime minister of Russia, minister of economy, and first deputy prime minister] wrote a book detailing what really did happen.
As I’ve explained to you, the former Soviet system was dependant on limited trade [specifically grain] with the WEST to feed its population. As Gaidar recounts,
“In 1963, Nikita Khrushchev sent a letter to the leaders of the Socialist bloc, informing them that the Soviet Union would no longer be able to supply them with grain. That year, the Soviet state bought 12 million tons of grain--and spent one third of the country's gold reserves to do so. Khrushchev commented: "Soviet power cannot tolerate any more the shame that we had to endure."
Gaidar then goes on to tell the story of oil and how EXPENSIVE oil of the 1970’s led to military adventurism on the part of the Soviets. As Soviet oil production “ramped up” – the inevitable ‘production peaks’ meant that increasingly larger amounts of capital had to be invested back into oil producing infrastructure to maintain output levels.
But then oil prices sewered. Gold too.
Interestingly, Gaidar equates the 1980’s plunge of oil prices to the economic death and subsequent break-up of the Soviet Union. BUT – I would suggest that he mistakenly attributes this happening solely to events and decisions made in Saudi Arabia circa 1985.
Low oil prices were as important to the dismantling of the former Soviet Empire THEN as low gold prices are to the maintenance of “faith based” Global U.S. Dollar Hegemony NOW.
Familiar Fleece Jobs, The Song Remains The Same
Just last week, I spent an evening [Monday, June 11] at a ‘private’ mining-finance-related function in Toronto with a private merchant-banker associate. The function we attended featured the Rt. Hon. Jean Chrétien [former Prime Minister of Canada – 1993 to 2003] as speaker. After our meal he delivered a keynote address and then took questions from the audience.
Most of the questions were focused on world events.
My merchant banker friend asked the former P.M. what his views were on the likelihood of the "Amero" becoming a reality. He was somewhat evasive in answering this question with the gist of his response being that "IT" would require much study and consideration before it could ever be considered seriously.
A case-study which some would argue is going on RIGHT NOW – behind our collective backs!
Then I asked Mr. Chrétien about the dis-hoarding of Canada’s 600+ tons of sovereign gold.
While acknowledging that the dis-hoarding of Canada’s gold began in the Conservative regime before him – I asked him if, in retrospect, he felt that the continued sale of better than 300 tons of Canada’s sovereign gold under his leadership was "a good or prudent thing to do" - and would he act differently if he had the chance to do it all over again?
Mr. Chrétien’s response to me [if not verbatim – very close to these exact words],
"that was almost 15 years ago and I can not remember this thing, so I do not want to comment on that".
Amazing eh? The Swiss have news releases and “TRUMPET” future intentions to sell 250 tonnes of gold – but Canada’s former leader cannot even REMEMBER real sales of 300+ tonnes?
Hmmmmmmmmm?
The guy is a former Minister of Finance, Minister of Justice and Attorney General, Minister of National Revenue, Minister of Industry Trade and Commerce – AND Prime Minister for a little more than 10 years in which Canada disposed of more than 300 tons of sovereign gold – and he claims he doesn’t remember?
And did I mention, my dog ate my homework?
Although you had to be there to appreciate the inflection in his voice when he answered my question – it was MORE than apparent he DID NOT LIKE THE QUESTION.
We Beat Them At Their Own Game
We now know [or should know] that the Soviet System was really defeated – IRONICALLY – by good ole fashioned CENTRAL PLANNING [rigging of prices of oil and gold] by the world’s biggest proponents of FREE TRADE – the U.S. and Britain along with the COMPLETE pitching of Canada’s Sovereign Gold Stocks.
The deceptive rigging of markets carries on to this day. Maintenance of an inherently unstable, global, faith-based fiat empire demands this. Anyone who dares to see through and report on this thinly veiled sham for what it truly is – they’re challenged with “foggy memories” on the part of officialdom and intellectual ghetto-ization by academia and the mainstream press. All the lurid details of these “high-financial-crimes-against-humanity” are heavily embargoed by officialdom in the name of National Security and maintenance of U.S. Dollar Hegemony.
This is all perpetuated with the noble assistance of an indentured – disgrace-to-their-profession breed of sham, aiding-and-abetting economists.
With an older and wiser Mr. Putin now holding a hand flush with “energy aces” – me wonders if he might be intending to give us capitalists a lesson in our own ‘sheep-shearing’ game.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/20/2007 : 20:30:24
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Record cash flows fund mining consolidation - "As a surge of mergers and acquisitions mega-deals sweeps across the global mining sector, hunt or be hunted is the challenge for cash-rich companies seeking to ride the consolidation wave."
Speculation, not facts,
Speculation Takeover Continues For Alcan, Alcoa: BHP, Rio Tinto Front-Runners - " By this time next year, BHP Billiton Ltd. will likely own Alcoa Inc. and Rio Tinto should own Alcan Inc., an unnamed source told the Sydney Morning Herald, adding that Alcan has opened a data room so the Anglo-Australian mining giants can examine its books.
Update - 9:30 AM CST - From Bloomberg - "China may produce less stainless steel than expected this year after Shanxi Taigang Stainless Steel Co., the nation's biggest producer, and other mills agreed to cut supply by 20 percent from July 1, Taigang's President Chai Zhiyong said today." From Reuters - Africa "One of the interesting things is the talk from China's stainless steel mills that they may cut production by 20 percent," ANZ's Harrington said. "That is hurting nickel prices but it remains to be seen whether they can deliver on any promised cuts. This is probably more a message for Beijing that they are addressing concerns about the rapid expansion of the industry." (source) Your official prices for the day at $17.55/lb for cash and $17.28/lb for 3 month. Indications show 3 month nickel now selling down by $.20/lb.
Commodity super-cycle still strong - "Need proof that the commodities super-cycle is still going strong? Corporate activity in the commodity market is more than proof, while the fundamentals of platinum remain solid."
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/20/2007 : 20:41:47
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copper news
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Copper Is Little Changed in New York Before Possible Strikes
By Millie Munshi
June 20 (Bloomberg) -- Copper futures were little changed in New York as planned strikes in Chile and Peru threatened to disrupt supplies.
Contract workers at Chile's Codelco, the world's largest copper producer, may strike tomorrow to seek higher pay, and three unions at Southern Copper Corp.'s Peruvian operations plan to walk out June 23. Demand for copper exceeded production by 176,000 metric tons in the first four months of the year, the World Bureau of Metals Statistics said today.
``Prices are going to be volatile until we get a better sense of how much production will be lost because of the strikes,'' Donald Selkin, director of equity research at Joseph Stevens & Co. in New York, said. Copper, used to make pipes and wires, has gained 19 percent this year.
Copper futures for September delivery were up 0.2 cent to $3.4015 a pound at 11:26 a.m. on the Comex division of the New York Mercantile Exchange. They earlier rose as much as 1.4 percent. The price reached a record $4.04 a pound in May 2006, partly because of labor unrest.
Workers at Dona Ines de Collahuasi, Chile's third-largest copper mine, are preparing for a strike vote next week after owners Xstrata Plc and Anglo American Plc refused to sweeten a wage offer, a union leader said today. A strike already has disrupted deliveries at Zug, Switzerland-based Xstrata's refinery in Montreal.
`Every Ton Counts'
``The copper market is really in a situation where every ton counts,'' David Moore, a commodities strategist at Commonwealth Bank of Australia in Sydney, said in an interview.
Copper inventories monitored by the London Metal Exchange have plunged 38 percent this year to 114,200 metric tons, the lowest since Oct. 23.
``The continuing drawdown in stockpiles is a sign of the underlying supply restrictions,'' Selkin said.
On the London Metal Exchange, copper for delivery in three months rose $55, or 0.7 percent, to $7,480 a metric ton ($3.40 a pound). The metal has gained 11 percent in the last year.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/21/2007 : 18:18:25
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How gold can predict inflation
Report says it can do so up to two years in advance
David Berman, Financial Post
Published: Thursday, June 21, 2007
People like gold because of its relative scarcity and its allure as a commodity. People love it because of its traditional hedge against inflation: When prices are rising and consumers lose confidence in paper money, they turn to a hard asset that has a long history as a value vault.
But more than reflecting inflation, some observers believe gold can predict its arrival well into the future. If they are right, Canada's inflation rate has further to go before it finally tapers off. This means interest rates will also head higher before businesses and consumers finally get some relief.
The Bank of Canada released a report this week saying as much. Greg Tkacz, a researcher at the bank, said gold can predict inflation in various economies and up to two years ahead of time, even as sophisticated investors have other means of offsetting rising inflation using the futures market.
"Gold seems to be most significant for developed countries that have formally adopted inflation targets," he said in his report, which used data from 1994 to 2005.
In other words, it works best as an inflation predictor for countries such as Canada, Australia, the European Union, the U.K. and China, after gold prices are translated into domestic currencies. The explicit inflation target acts as an anchor for inflation expectations. However, Mr. Tkacz said it also works for two developed countries that do not have formal inflation targets: Japan and the United States.
He discovered that if the price of gold rises by 10%, the consumer price index in Canada will rise one quarter of a percentage point over the next 12 months. With the price of gold soaring as much as 25% in Canadian-dollar terms within the past year (it has since retreated), Mr. Tkacz's research points to the possibility of substantially higher inflation ahead.
Given that he works at the Bank of Canada, his conclusions could also have an impact on how the central bank reacts to an inflation rate that remains stubbornly high. The consumer price index for May rose 2.2% over last year, above the bank's 2% target.
Mr. Tkacz also noted, though, that the Canadian dollar has an impact here. If the price of gold rises 10% and the loonie rises 5%, the impact on inflation is a wash. Since the dollar has risen about 10% over the past three months, the spike in inflation could be short-lived.
"If anything, the lagged rises in the Canadian dollar value of gold imply an even larger surge in core inflation than we've seen," said David Wolf, chief strategist and head of Canadian economics at Merrill Lynch, in a note to clients yesterday. "But it also implies that such a surge would be temporary, as those prices have recently reversed lower amid a strong Canadian dollar and flat-to-lower U.S.-dollar prices for gold."
If you are a gold bug and dreaming of the day when high inflation bumps off the U.S. dollar as the world's reserve currency, you may have to wait a little longer.
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Shanghai to set up gold fund company
Last Updated(Beijing Time):2007-06-20 15:44
Shanghai International Trust and Investment Co Ltd (SITICO), member of the Shanghai Gold Exchange, is designing products for gold funds. Its parent company, Shanghai International Group (SIG), will set up China Gold Fund Management Co Ltd, sources said.
According to SITICO's plan, gold fund products will be sold either in the form of trust products or as part of an investment portfolio.
"Research of gold fund products by SIG and SITICO started last year," said a person closer to the matter. "They plan to invest in gold producers listed in Shanghai and Hong Kong. And three major items traded in the Shanghai Gold Exchange - Au99.99, Au99.95 and Au (T+D) - as well as overseas gold futures may also be the investment targets of the first gold fund."
SIG is also considering launching China Gold Fund Management Co Ltd.
A year ago, the China Gold Association, joined by China Gold Group, several banks and trust companies, planned to create China Gold Fund Management Co Ltd, which would cover gold derivatives trading and investment in gold mines. However, due to worries about high capital demand and operational risks, the plan was put aside. SIG is picking up and continuing their plan, according to the insider.
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US gold ends down as support gives way, rates rise
NEW YORK, June 21 (Reuters) - U.S. gold futures finished with moderate losses on Thursday after probing one-week lows, with speculative sellers able to push through technical support levels amid dollar strength and longer-dated U.S. interest rate increases, analysts said.
"It is really all interest rate driven right now, which obviously means dollar driven. The euro looks like it might roll over and have the dollar strengthen again," said Frank McGhee, head precious metals trader at Integrated Brokerage Services Llc in Chicago.
Most-active gold futures for August on the COMEX division of the New York Mercantile Exchange settled $5.80 lower at $654.20 an ounce, up from the session low of $650.50, a level dating back to June 14, though down from the $659.50 top. On Tuesday, it set a $665.80 high, last seen on June 8.
Short-term, implications of higher rates could mean liquidity and inflation will be sucked out of the financial system, making some investors more cautious about holding assets like gold.
"The fundamental point is that we've had a true realignment of interest rates with the (U.S. Treasury) 10-year note (yield) between 5.10 and 5.25 percent. That puts a very significant downward pressure on the euro, upward pressure on the dollar, which is very negative for gold," said McGhee.
On Thursday, the dollar strengthened against the euro with the focus on the rising U.S. interest rate outlook. A higher dollar tends to make investment in dollar-denominated assets like gold more expensive for overseas buyers.
Longer-term U.S. government debt prices fell on Thursday as jittery investors wanted to pare exposure to long-term rates, seeking the safe haven of short-term maturities.
Patrick Fearon, precious metals analyst at A.G. Edwards & Sons said a dramatic rise in longer yields at some point could prolong the housing slump, complicate things in the auto sector, weigh on investment and consumer spending, which, added together, would eventually bring down inflation.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/21/2007 : 18:28:46
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(silver junior) Nickel news
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(we really want to let this story drop but it just won't die)
Demand woes hit nickel prices - "Nickel prices slid to a five-month low yesterday and are poised to head lower on reports that several major Chinese stainless steel producers are about to cut output."
Major Chinese SS makers to cut July production by 20% to 30% - "China's major stainless steel mills have jointly decided to reduce monthly production by between 20% and 30% in July, in order to combat falling domestic stainless steel prices, a major stainless steel company official told Interfax."
No cap on Chinese steel exports - Cisa - "A top official from the China's Iron & Steel Assn (Cisa) has denied reports in the Chinese media that the country's steel mills have pledged to restrict exports to under 10 percent of steel output."
Domestic stainless steel production plant to be 20% nickel prices diving - "Xinhua learned yesterday, the major domestic stainless steel production plant ready in July 20% of the news enabled the market to sudden change of wind direction." ...(quote - "Informed sources have told reporters, one is stainless steel plant under normal plan in the middle of the year so that equipment maintenance has reduced output, on the other hand, Due to the recent domestic stainless steel market downturn, and nickel prices skyrocketing costs surge. to take measures to maintain the steel market and the normal operation of enterprises.")
China stainless steel mills plan 20-30% output cut - "Four major Chinese stainless steel mills, including the two largest, Taiyuan Iron and Steel (Taigang) and Baosteel , plan to cut production by 20 to 30 percent each in July, company sources said on Thursday. "
(Comment - at last check - 3, now 4, or is that 5, Chinese stainless steel makers supposedly had agreed over the weekend to cut stainless steel production. One of the 3 denied any such agreement. As is seen above, another of the three was reportedly shutting down for scheduled maintenance anyway. We posted reports we had read in Chinese media that Chinese steel makers had agreed to shipping only 10% of their production in exports. Today that is being denied. Following this is like trying to figure out the plot of a bad soap opera)
'Super' Stainless Steel Developed - "A new type of stainless steel alloy developed at Oak Ridge National Laboratory could allow for significantly increased operating temperatures and corresponding increases in efficiency in future energy production systems."
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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myfundsarelow
Penny Collector Member
USA
388 Posts |
Posted - 06/21/2007 : 21:28:55
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| hello all today i cashed in 100.00 us nickels opened up a checking account with chase bank had to commit to direct deposit of my choice i will receive 75.00dollar bonous the checking account is free of any charges please talk to bank people before you commit yourself this offer ends last day in june 2007 75.00 is a good return on a 100.00 investment PEACE! |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/21/2007 : 21:40:17
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Congratulations myfundsarelow, you made a profit off your nickels without resorting to melting them.
Are you going to cash a check for $75 and buy nickels or pennies with them and double your money, or use it to buy some silver?
Making money off the banks, what a novel idea.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 06/22/2007 : 16:43:27
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Yes, congratulations. Those banks will do anything to get the nickels back. ;)
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Fanaticism is doubling one's efforts, yet forgetting one's purpose.
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/25/2007 : 20:07:55
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UPDATE 6-Gold falls on bearish sentiment; eyes U.S. data
By Frank Tang and Atul Prakash
Excerpt:
NEW YORK/LONDON, June 25 (Reuters) - Gold prices slipped on Monday on bearish sentiment, but closed off session lows as crude oil prices recovered, and trade was quiet ahead of a slew of economic indicators scheduled this week, dealers said.
"As far as the metals are concerned, it's really lackluster," Jonathan Jossen, an independent trader, said from the COMEX floor in New York.
Spot gold fell as low as $648.70 an ounce and was quoted at $650.60/651.20 by 3:21 p.m. EDT against $653.60/655.10 late in New York on Friday.
Gold for August delivery on the New York Mercantile Exchange's COMEX division settled down $2.30 at $654.70 an ounce, dealing from $651.60 to $657.70.
Jossen said investor sentiment was largely bearish because of a host of factors including a higher interest-rate environment, weaker oil prices and sagging stock markets.
The UK's leading shares fell for a sixth session in a row, tracking steep falls on Wall Street at the end of last week and with banks and commodities reflecting much of the decline.
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China's nickel, molybdenum powder, platinum exports rise in May
Singapore (Platts)--25Jun2007
China's unwrought nickel exports in May 2007 reached 1,986 mt, which is a
54% gain compared with the 1,288 mt exported in April, the latest figures from
the General Administration of Customs of China showed Monday. Nickel exports
to date in January-May totaled 9,870 mt.
In May 2007, China imported 6,983 mt of unwrought nickel, down from 9,649
mt imported in April. Total unwrought nickel imported in the first five months
was 46,190 mt.
The country also exported 491,819 kg of molybdenum powder in May 2007, up
from the 420,736 kg exported in April. Total moly powder exported in the five
months was 1.64 million kg. Moly powder imports in May reached 16,480 kg, up
marginally from 16,424 kg imported a month ago. The total imported amount in
January-May was 80,292 kg.
Meanwhile, platinum exports jumped in May, reaching 8,056 grams, compared
with the 3,440 g exported in April. Total platinum exported in January-May was
175,500 g. The country also imported 4.11 million g of platinum in May, down
from the 5.23 million g imported in April. Total platinum imported in the
first five months amounted to 21.93 million g.
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Strike averted in South African gold mines, negotiations to resume
Key quote:
The National Union of Mineworkers (NUM) pledged that it would return to negotiations with South Africa’s Chamber of Mines, stressing that gold miner unions are committed to finding a settlement.
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The Thai gold rush
Nareerat Wiriyapong
Mon, 25 Jun 2007
Nantacha Kanchornkijtrakul used to leave the security at her suburban Bangkok gold shop to male relatives she trusted with the handgun hidden under the counter in case of a robbery.
But after a string of gold heists across Thailand, the 37-year-old decided she needed to learn how to handle a gun herself.
"I had thought about going to a firing range for a while, but I decided this was the time to learn, for the sake of my own safety and my property," said Nantacha, who has run her gold shop for six years.
So she and four female relatives decided to join a one-day gun training workshop organised by the Thai police in Bangkok's southern suburbs.
Robberies on the rise
Police say gold robberies are on the rise, leading them to organise gun training courses and other security services for gold shops around the capital.
Most of the robbers do not appear to be professional crooks, rather than ordinary people driven by desperation amid an economic slowdown, said Lieutenant Colonel Aek Aungsananont.
"We arrested one robber who admitted that he stole gold after losing 50 000 baht ($1500) gambling on a football match," said Aek, police commander for Thailand's central region which includes metro Bangkok.
In addition to gun training, police in nearby Ayutthaya province have also taught gold traders how to use walkie-talkies to quickly contact police in an emergency.
"Walkie-talkies allow gold shop owners to reach police much faster than using the telephone. It allows police who are on duty nearby to reach the scene and track down the robber," said Lieutenant Colonel Sombat Chuchaiya of Ayutthaya police.
Weapons smuggled
Five gold robberies were reported around Bangkok last month, with arrests made in three cases.
Robberies in general also appear to be on the rise, with 5823 robberies of all types reported in the first four months of this year, police said.
Police could not provide crime statistics from last year for comparison, but say that robberies are becoming more common and more violent.
Two weeks ago, four people were killed in a shooting spree in a suburban Bangkok market when a 28-year-old opened fire with an AK-47 rifle. The attacker and a policeman were among those killed.
"Weapons are smuggled easily through Thailand's border with Cambodia, and are available at cheap prices. Police have limited personnel to monitor the smuggling," Aek said.
Traditionally, Thailand's 7000 gold shops become prime targets for robbers during times of economic trouble, according to the Gold Traders Association.
Get-rich-quick
"As gold prices rise, thieves think that attacking a gold shop is an easy way to get rich," said the association's president Jitti Tangsithpakdi.
"At the same time, police don't have enough staff to look after every gold shop across the nation. Consequently, owners have to look at any way possible to protect themselves from attack," he added.
Some shops have begun installing emergency lights and sirens, or even placing protective metal grills over their counters to separate staff from clients.
Gold trader Wimolthip Jitnoppakhun said she was thinking about installing a grill in her store outside Bangkok after her neighbour's gold shop was robbed.
"I think the expense of only 20 000 baht ($579) for installing the grill is not too expensive, compared to the possible harm to myself or my belongings if there was another attack," said the 32-year-old.
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Excerpts:
28 metal analysts responded to the weekly forecast questionnaire for Shanghai Nonferrous Metals. For this week, 5 (17%) felt the price of nickel would rise, while 23 (82%) felt the market would fall. None forecast stability.
Nickel Price Drop Causes Stainless Steel Output's Reduction - "After the dive of the prices of nickel and stainless steel, several homegrown stainless steel manufacturers prepare to fight back and will jointly reduce their output for 20% from July."
Nickel Detracted from Bulls - "The nickel prices sank below $40,000 per ton past week first time from February, while the monthly loss exceeded 30 percent. The reasons of such unhealthy performance are the bull-targeted regulations introduced by London Metal Exchange and the general reduction in nickel consumption by steel producers. But the analysts forecast no further decline, expecting the achieved benchmarks to survive till the year-end."
EU stainless steel imports jump in first 2 months - "In 2007, the amount of European Union imports of stainless steel flat products during January to February was eight times bigger than the same period in 2006. This figures are provided by the Iron & Steel Statistics Bureau (ISSB)."
Chinese steel makers posts huge surge in profit in January to April - "It is reported that China's 77 medium and large steel mills have recorded a combined profit of CNY 48.6 billion in January to April 2007 up by 202.2% YoY as compared to January to April 2006."
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25% wage increase sought
As Southern Copper workers strike at Peruvian mines, markets hold steady
Key quote:
Union workers walked off the job Saturday at Southern Copper’s two copper mines and the Ilo smelter in Peru. However, global markets this morning had yet to show the impact of the strike.
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Credit Suisse forecasts gold testing $700/oz, along with continuance of base metals corrections
In a recently published analysis, Credit Suisse cited sound fundamentals, including new gold ETF investment, should help gold test $700/oz. However, their outlook for base metals prices is bleaker, at least until the fourth quarter of 2007.
Credit Suisse declared that "gold and silver prices are back on the road to recovery"-- perhaps even testing US$700/oz this year--while base metals price corrections should continue for awhile.
In a recent analysis commodity analysts Tobias Merath and Eliance Tanner said gold recovery is "warranted by sound fundamentals" including new investment in gold ETFs and encouraging signs in the physical market.
Noting that the correlation between gold and silver has increased to a factor of more than 0.8 in recent months, Merath and Tanner suggested that "silver prices should also reap benefits from the upbeat outlook for gold." Credit Suisse recommended that investors who "believe that the return potential of a pure gold investment is too low should consider taking positions in a combination of gold and silver."
Credit Suisse's research revealed that a "negative market sentiment prevails" in base metals, predicting further declines in base metals prices. Nevertheless, they suggested that, as U.S. economic growth is anticipated to re-accelerate at the beginning of the fourth quarter, "the door to a favorable buying opportunity in the base metals sector will probably open up again at this point in time."
In the meantime, "investors in base metals should focus on those base metals markets that recorded a less pronounced surge during the strong rally from February to April and where the outlook for Chinese foreign-trade data is rather position," they recommended.
Credit Suisse suggested that zinc--whose prices turned in the worst performance of all base metals in recent month declining more than 11% since the beginning of the year-should, however, begin trading up to $3,800/tonne during the next three months as China has again become a net importer of zinc.
As of the close of business Tuesday on the LME, zinc stockpiles were reported at 71,250 tonnes at a price of $3,700/tonne.
Meanwhile, Reuters reported that LME nickel delivery in three months fell 6.4% to its lowest price ($39,000/tonne) since February 23. Reuters noted that a "significant sell-off in base metals" occurred last week due to the prospect of higher interest rates that could lower commodity demand.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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myfundsarelow
Penny Collector Member
USA
388 Posts |
Posted - 06/26/2007 : 00:58:24
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| thanks pencilvanian for the idea of reinvesting the $75.00 i will look into my options i think iwill have the wife do the same thing in her name the dough just keeps rolling in PEACE! PS 2times 75.00 equles 6 25.00 bricks of cents |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/26/2007 : 21:15:40
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There is a lot of news today, I am going to have to divide it up into sections so it will all fit (I hope)
Gold and silver news.
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Silver prices drop over 5%, lead losses in metals futures
By Myra P. Saefong
Last Update: 12:55 PM ET Jun 26, 2007
SAN FRANCISCO (MarketWatch) -- July silver dropped 5.5%, or 70.7 cents, to $12.17 an ounce Tuesday after sinking as low as $12.15, the contract's lowest level since October of last year. August gold dropped $11, or 1.7%, ti $643.50 an ounce, after a low of $643.50. It's trading at its weakest level since Jan. 16. The options expiration of the July silver and gold contracts likely contributed to the sell off in metals.
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Gold futures drop over $9 to end at five-month low
Silver sinks to October levels; traders eye options expiration, interest rates
By Myra P. Saefong & Polya Lesova, MarketWatch
Last Update: 4:12 PM ET Jun 26, 2007
SAN FRANCISCO (MarketWatch) -- Gold futures dropped more than $9 an ounce Tuesday to close at their lowest level since mid-January, and silver futures sank to their weakest level in eight months, pressured by the options expiration on the July contracts and weaker oil prices as traders awaited a Federal Reserve decision on interest rates due later this week.
"This erosion was in the making for some time now [certainly since the scary June 8 drop]," said Jon Nadler, an analyst at Kitco Bullion Dealers. "People ignored the subtext of risk aversion becoming trendy -- and now they are suffering the consequences."
"Technicals have converged with short-term fundamentals to yield a pivotal tone change in the market," he said in e-mailed comments.
Gold for August delivery closed 1.4%, or $9.40, lower at $645.30 an ounce on the New York Mercantile Exchange after tapping a low of $642.80. It is trading at the contract's weakest intraday level since Jan. 16. On Monday, the contract shed $2.30 to close at $654.70.
Silver futures followed suit, with its July contract dropping to a low of $12.15 an ounce, its weakest intraday level since Oct. 25, 2006. It closed down 4.6%, or 59.7 cents, at $12.28.
"Expectations of a more hawkish stance on interest rates by the world's central banks looks set to keep gold on a back footing in the coming sessions," said James Moore, analyst at TheBullionDesk.com, in a research report.
The expiration of options on the July gold and silver contracts in New York Tuesday was also likely contributing to the liquidation in the metals, according to Mark O'Byrne, director at Gold & Silver Investments Ltd.
In the meantime, traders continued to watch all gauges of economic activity.
The Federal Reserve will hold a meeting on Wednesday and Thursday, with its decision on interest rates expected on Thursday. The Fed is widely expected to leave rates on hold, but investors will be eager to see if the committee's accompanying statement hints at whether rate increases or reductions could be in store in coming months.
There is "lots of talk of a hawkish stance from the Fed [and] higher rates are negative for gold," said Charles Nedoss, an analyst at Peak Trading Group. And "we are through many technical levels -- it's going to take a while for the dust to settle."
Economic data flow
On Tuesday, Standard & Poor's Case-Shiller home price index showed that home prices in 10 major U.S. cities dropped at the fastest pace in 16 years during the 12 months ending April.
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Local banks start gold bullion trading(1)
THE Shanghai Gold Exchange will launch individual gold bullion trading nationwide in July by teaming up with Industrial Bank
The exchange will hold a joint briefing with Industrial Bank about the service in the first part of July, said the gold bourse yesterday.
It will later launch trading through Huaxia Bank. Industrial and Commercial Bank of China is likely be the third player to join the scheme.
Under the plan, individual investors will be able to trade gold from a minimum threshold of 100 grams, which would require about 16,000 yuan (US$2,099) based on yesterday's prices on the bourse.
The main selling point is that investors can take the bullion home at cheaper prices than sold by jewelers and coin makers. For instance, investment-grade bullion commands more than a 10 percent premium in the market.
Lenders including Bank of China and China Construction Bank already offer virtual gold trading, although investors can't hold the actual bullion, instead betting on prices through a special bank account.
The Shanghai branch of ICBC started a trial program of individual gold trading in July 2005, where investors can take bullion home. The branch cut the trading threshold from 1,000 grams to 100 grams last December to boost its market appeal.
By last Friday, 3,301 investors had opened gold-trading accounts at the branch. Turnover was 6,081.3 kilograms in 2006, and so far this year is 1,476.3 kilograms, the bank said.
The People's Bank of China, the central bank, gave approval for the bourse to start nationwide gold trading services at the end of 2006, the gold bourse said yesterday.
"The pace of opening the market now depends on the system compliance of lenders," said a bourse official. "Our system was ready two years ago."
The bourse said earlier this month that it will join hands with more commercial banks to trade gold for retail investors.
Chinese people have traditionally kept gold bullion on hand as a safe haven to hedge against inflation and as a symbol of fortune. The country is the world's third-biggest consumer of gold.
China deregulated its gold market in late 2002, when the Shanghai Gold Exchange officially started operation to allow gold producers, corporate users and banks to trade the yellow metal.
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IMF delays consideration of gold reserves sale
The International Monetary Fund has delayed by one month a board meeting to discuss financial reform, including the possible sale of some of its valuable gold reserves, a spokesman said Tuesday.
"The current plan is to have a board discussion on the Fund income position in late July," IMF spokesman William Murray told AFP.
In early June, another spokesman, David Hawley, had said an initial board meeting to work on an income model "will take place later this month."
Revision of the IMF's financial model is a key element in the reform of the six-decade-old multilateral institution, which is seeking to redefine its role in a substantially changed global financial landscape.
The global lender has seen its operational income slump as debtor countries repay their Fund loans early and some countries are shunning its credit and the accompanying restrictions.
Murray said the work program plan was "just an aim ... not a hard timeline."
"The income model is still on track for initial board discussion," he said.
In late January, an IMF-appointed panel of leading experts called on the Fund to sell some of its gold reserves to assure its future.
The Fund has forecast a revenue shortfall of 165 million dollars for its 2007 fiscal year ended April 30 largely due to a larger-than-expected decline in outstanding IMF credit. For its fiscal year 2008, the income shortfall is expected to balloon to 224 million dollars.
The panel of experts predicted in January the deficit would climb to 365 million dollars by 2010. They suggested, among other measures, the sale of 400 metric tons of gold, which at the time could raise 6.6 billion dollars at current market prices.
The IMF has more than 3,200 metric tonnes of gold as part of its financial stockpile, but has resisted selling any.
IMF chief Rodrigo Rato appointed the panel in May 2006 to come up with ideas to avert a cash crisis for the global lender.
The committee was chaired by Andrew Crockett, former head of the Bank for International Settlements, and also included European Central Bank president Jean-Claude Trichet and People's Bank of China governor Zhou Xiaochuan.
Money from the gold sales should be put in an endowment fund, which could yield annual investment profits of 195 million dollars, the report by Crockett's panel said.
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‘Gold among best commodity opportunities’
JUN 26 : Gold will be among the five best commodity-investment opportunities over the next two years because of declining production, according to New York-based hedge fund Ospraie Management LLC.
Rising costs and a lack of investment have limited output in South Africa, the world’s largest gold producer, Peru and other countries, said Jason Mraz, head trader at Ospraie, which invests $7 billion in commodities and basic industries.
“We look at gold as a barometer of wealth in the world,” he said at a conference in London on Tuesday. “The underpinning of demand is very strong.” Growing purchasing power in Asian countries such as India and China has spurred demand for gold, pushing prices up 11% in the past year. Gold production dropped 3.1% to a 10-year low of 2,471 metric tonne in 2006, London-based research company GFMS Ltd said in a report last month.
Gold for immediate delivery dropped $2.05, or 0.3%, to $648.95 an ounce in London on Tuesday. “As you get macroeconomic factors pushing gold down below $650 an ounce, there will be compelling investment opportunities” for the metal, Mraz said.
Rising costs have hindered exploration by gold producers such as Barrick Gold Corp, the world’s largest. Newmont Mining Corp, the second biggest producer, said in April first-quarter profit plunged 67% as output slumped and costs rose.
“Cost curves are not allowing prices to go back to historical norms,” Mraz said. “We don’t think the mining industry has the ability to respond to demand. The compelling story is that what we see in gold is indicative of other metals, which is the shortage of mining labour.”
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Zimbabwe reveals proposed takeover of foreign-owned mining operations
The Zimbabwe government will force foreign-owned mining firms in the country to cede controlling shareholding to indigenous Zimbabweans before the end of the year.
A dark cloud hangs over foreign mining companies in Zimbabwe following the publication Monday by the government of proposed legislation that will force foreign-owned firms to cede controlling shareholding to indigenous Zimbabweans.
While the Indigenisation and Economic Empowerment Bill for now stops short of a unilateral takeover of foreign owned companies, Minister of Indigenisation and Empowerment Paul Mangwana told Women In Mining in Central Zimbabwe over the weekend that parliament, majority controlled by the ruling ZANU-PF, will fast-track it when it reconvenes next month to become law by August to ensure that companies comply by year-end.
Multi-national mining firms that may be affected once the proposed legislation becomes law are Implats-owned Zimplats, Anglo Zimbabwe, Mwana Africa-owned Bindura Nickel Corporation, Rio Tinto's Rio Zim and Halogen, formerly Falgold.
"The government is concerned by the existing shareholding structure in most mining companies hence we are going ahead with plans to take some shares from those companies that are wholly foreign-owned," Mangwana was quoted by ZimOnline .
He added, "We would want all foreign-owned mining companies to shed off at least 51 percent of shares to locals. The Indigenisation Bill would be ready by August and things will move before the end of the year."
The proposed law seeks to ensure that at least 51 percent of shares in every public company or any other business are owned by indigenous Zimbabweans.
It describes an indigenous Zimbabwean as a person who was disadvantaged by "unfair discrimination on the grounds of his or her race" before the country's independence from Britain in 1980.
Government departments will be asked to procure 51% of their goods and services from businesses in which controlling interest is held by indigenous Zimbabweans.
The bill also states that no projected or proposed investment, shall be approved unless a controlling interest is reserved for indigenous Zimbabweans.
Analysts have likened the bill to the on-going controversial seizure of white-owned commercial farms for redistribution to black amid warnings that it would scare away investors and decimate the country's struggling industrial sector.
They argue that ceding large and sophisticated businesses to blacks, most of who do not have funds or skills, in a country where the mining sector has a shortfall of 3000 professionals, would result in the sector being run to the ground as happened with agriculture.
On Monday the country's Chamber of Mines, representing 200 mining houses, said the bill would effectively kill off investment needed to keep the mines open and Zimbabwe's platinum, diamond and other mineral mines, already under extreme pressure, would suffocate if President Robert Mugabe's government took a majority stake in the companies.
In Windhoek, Namibia, early this month, Minister of Mines Amos Midzi confirmed the bill but ruled out a sweeping takeover of foreign owned mining companies saying exceptions would be granted to foreign companies that demonstrate "some form of social investment".
"There are some companies with a good, commendable track record in terms of their social responsibility. We will take that into consideration," he told journalists on the sidelines of a metal investment conference.
Midzi said his government would also take control of strategic resource sectors such as uranium, coal and methane gas under the new policy.
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Underpaid Zimbabwe mine workers might lay down their tools
A lengthy wage dispute between Zimbabwe’s Chamber of Mines and the Associated Mine Workers of Zimbabwe may harm one of the few remaining foreign currency earners for the troubled nation.
A protracted wage dispute between the Zimbabwe Chamber of Mines (ZCM) - representing interests of mining companies in the country - and the Associated Mine Workers of Zimbabwe (AMWZ) has threatened to once again stall the potential of the mineral-rich African nation to reap benefits from the sector.
The mining sector remains one of Zimbabwe's few remaining major foreign currency earners. A combination of investor skepticism, occasioned by Harare's proposed mines-grab, and the failure of the country's central bank to pay for gold deliveries has threatened viability of several mining companies.
Wage disputes, whose negotiations are at the third-degree level, remain deadlocked after the two parties, the chamber and the union foresee workers laying down their tools at Zimbabwe's mines.
President of AMWUZ Tinago Ruzive confirmed the fears: "We have just walked out of the salary negotiation meeting we had with the Chamber of Mines." He accused the Chamber of Mines of double standards and insincerity, claiming the mining companies did not have the workers' interests at heart.
Ruzive said the mine workers' representative had proposed a minimum wage of ZIM$4 million per month. The chamber, glaringly furious, dismissed the wage proposal, saying they could not afford that amount as a monthly wage.
Zimbabwe's unprecedented economic slump, now in its seventh year, has degraded the quality of life for workers and mine workers--most of whom work long distances from their homes-who have felt the brunt of the situation.
The lowest-paid mine worker in Zimbabwe currently earns about ZIM$600,000 (less than a US dollar) a month. Mine workers who spoke to Mineweb said they were simply going to work without any hopes that their wages would be adjusted.
"Life has not been fair and well for us (mine workers) and we have reached a situation where we have had to contemplate the worse, i.e. leaving the sector," said Johannes Murwira, a mine worker at one of Zimbabwe's mines.
But in a country where unemployment figures hover above 80 percent, the mine workers face a dilemma on whether to leave their current, low-paid employment, or whether they should hang on and hope for the best.
Ruzive revealed that plans were afoot for the AMWUZ to take the plight of the mine workers to the government level.
According to the country's Chamber of Mines, gold output fell 17 percent in the first two months of this year as the nation only produced 1,587 kg of bullion in January and February, down 17 percent from the same period last year.
The chamber has also predicted another production downslide for the current quarter. The group said the country's static exchange rate, escalating costs and payment delays by Fidelity Printers and Refineries--a subsidiary of the nation's central bank, and the sole gold buyer in the country--are pushing the sector close to collapse.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/26/2007 : 21:34:17
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Base metal news (silver Junior too)
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Commodities Boom Slowing - "Continuing growth in mineral and energy commodity prices and export volumes will boost Australia's commodity earnings to nearly $150 billion in the new financial year starting next Sunday, July 1."
Courtesy/Copyright Dow Jones Newswire - "Chinese imports of nickel ores and concentrates hit another record high in May of 1.642 million tons, leaving China on target to produce around 100,000 tons of contained nickel this year, says Macquarie. Imports of nickel ore from the Philippines, Indonesia and New Caledonia totaled 1.603 million tons, up slightly from 1.591 million tons last in April. "For the first five months as a whole, we estimate that imports of ore from these three countries for nickel pig iron production were equivalent to 43,527 tons, up from just 2,935 tons in the same period of last year and 26,180 tons for all of 2006," Macquarie says."
China's nickel, molybdenum powder, platinum exports rise in May - "China's unwrought nickel exports in May 2007 reached 1,986 mt, which is a 54% gain compared with the 1,288 mt exported in April, the latest figures from the General Administration of Customs of China showed Monday. Nickel exports to date in January-May totaled 9,870 mt."
Concerns over High Nickel Prices Send Manganese Prices Skyward - "Although manganese is the fourth most heavily consumed metal – behind iron, aluminum and copper, most investors have failed to observe the dramatic bull market in manganese which began unfolding this past spring."
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ALL CODELCO CHILEAN DIVISIONS IMPACTED
As contract workers strike at world’s largest copper miner, violence erupts
The largest strike in recent memory to hit Codelco, the world’s biggest copper miner, turned violent Monday as masked protestors burned buses and destroyed company property at the company’s El Teniente Division in Chile.
Violence erupted Monday as contract workers at the world's largest copper producer, Chile's state-owned Codelco, began a strike at the company's five mining divisions.
The Santiago Times reported Tuesday that masked protestors entered company property at Codelco's El Teniente Division--the company's second largest copper mine located in Rancagua--burning buses and destroying company property.
El Teniente spokesman Jorge Sanhueza told the Times that he believes the strike has been infiltrated by violent groups that are unrelated to labor unions.
For weeks, the subcontractors threatened to go on strike across the five Codelco divisions in Chile. They are demanding higher wages and performance bonuses based on production, similar to those awarded to Codelco's 14,000 direct employees. Jorge Pena, president of the contract workers' union in Rancagua, which staffs the El Teniente mine, told the Associated Press that their demands also include "a health plan, housing and education benefits."
On its web site, Codelco reported that workers slowed production at the El Teniente Division after protestors used burning tires and buses to block roads to mine. Videos and photos of the violence were posted on the site. The company said it would take legal action against those responsible for the property damage.
Codelco reported road blocks at entrances to other Codelco mines, but added no violence was committed against the operations or their employees.
The contract workers employed by Codelco provide transport and catering services, maintain and repair equipment, engage in earthmoving, build mine infrastructure and participate in mine expansion projects. In an interview with Bloomberg, Cristian Cuevas, President of the Confederation of Copper Workers, estimated that about 28,000 contract workers are taking part in the strike.
However, Codelco claimed that that only 5% of its contract workforce of 30,000 has actually participated in the strike. In addition to El Teniente, production was slowed at the Salvador and Andina mines. Two other copper mines and the Ventanas smelter were producing at normal levels, the company claimed.
Luis Guerra, president of Codelco's largest union at the Ventanas smelter, told Bloomberg, however, that production has slowed at the smelter because contractors' employees run part of the machinery. Sergio Flores, president of one of two miners' unions at Andina claimed that Andina had to stop production.
Egidio Masias, president of the largest union at the El Salvador Division, told Bloomberg that copper mining was halted although the smelter was running normally. El Salvador, Andina and El Teniente combined comprise nearly 48% of Codelco's copper production.
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Zimbabwe’s Bindura Nickel Corporation focuses on difficult year ahead
Bindura Nickel has reported a 10% drop in nickel sales from 5,994 tonnes to 5,374 tonnes for the period ended March 31, 2007 because of reduce nickel concentrate output from mines.
HARARE -
Zimbabwe's Bindura Nickel Corporation, whose annual output for nickel totaled 6,993 tonnes, has focused another difficult year ahead as the country's mining sector continues to perform dismally.
The nickel miner--with fixed assets worth $21.4 billion, including three mines--recorded a 10 percent decline in nickel output, Chairman Kalaa Mpinga said. However, the drop in sales was compensated by higher nickel prices.
At a time when nickel prices are continuing on the upward trend, the company, just like any other mining company in Zimbabwe, failed to capitalize on this development.
"The business environment in the year ahead is likely to remain extremely difficult," Mpinga said.
Zimbabwe's macro-economic fundamentals, which have in recent years been unviable, "continue to pose a threat to the viability of business" particularly with regards to escalating levels of hyperinflation."
Zimbabwe is currently reeling under power outages of up to 15 hours daily and this is likely to result in another nickel output nosedive.
The nickel sector, Mpinga added, is also under threat from the "debilitating effects of competition for skills, locally, regionally and globally".
The rapidly growing platinum sector "is expected to absorb a significant proportion of the dwindling national pool of skills," he added. "Industry awaits publication of (the) government's intentions with respect to ownership of mines, as the review of the Mines and Minerals Act remains uncompleted."
Speculation and uncertainty has gripped Zimbabwe's mining sector, especially on the investments sector and pressure is mounting for the government to re-open several small-scale mines closed under Harare's controversial blitz on illegal mining operations. Such closures, mining experts in Zimbabwe maintained this week, continue to undermine Zimbabwe's potential to benefit from a huge boom in mineral prices worldwide.
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I think this will effect the rice of metals it increase somehow...
UN commodity fund to support base metal mining in Southern Africa
A UN autonomous agency that has long been involved in the agricultural sector is broadening its focus in base metals mining due to high metals prices.
Rising base metals prices on the world market, spurred by high demands in China and India, have resulted in the Common Fund for Commodities, a UN autonomous agency that has long focused mainly on supporting agricultural sector projects, broadening its focus into minerals.
The fund will, beginning in 2008, support mining projects in southern Africa, said its spokesperson Charles Jama.
"The region has more minerals than agricultural activities due to perennial droughts," Jama told Mineweb on the sidelines of the International Seminar on Mining Investment for Base Metals in Southern Africa which started in Windhoek, Namibia, Monday.
He added, "This is a very good investment."
The fund has only sponsored five projects in the minerals sector out of around 250 in its history, Jama said.
However, as part of its new five-year funding cycle, the Amsterdam-based fund will set aside US$200 million for 2008-2012 to support base minerals mining in the region.
In a move likely to get the fund credit from Zimbabwe, it will work towards promoting the empowerment of locals to participate in the mining sector.
It will also work towards ensuring that the region comes up with uniform standards on safeguarding the environment.
Jama said the fund will also promote value addition and beneficiation of base minerals in the region.
"We are committed to poverty reduction. We note the boom in metals prices in the face of poverty that prevails in the region. The mining sector has the potential of reversing this," Jama said.
Addressing the seminar Monday, Ali Mchumo, the fund's managing director, said his organisation has identified the southern African region in an assessment of how other countries can benefit from mineral resources.
Mchumo said the region has enormous existing and unexplored potential for the mining sector.
"It is our belief that if the countries in the region can have a coordinated approach in managing the investment in and the exploitation iof the sector, greater benefits could accrue to the people of the region," said Mchumo. "Given our mandate, the Common Fund wants to make itself available to make a contribution however modest in enhancing the capacity of the mineral producing countries to benefit more from the resources."
To access the funding, countries have to be members of an International Commodity Body (ICB), which is made up of producers and consumers of a commodity such as the Lead and Zinc Study Group.
Only three countries, namely Namibia, South Africa and Zambia are members of metals ICBs in the whole of Africa.
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Quote: In a move likely to get the fund credit from Zimbabwe, it will work towards promoting the empowerment of locals to participate in the mining sector.
It will also work towards ensuring that the region comes up with uniform standards on safeguarding the environment.
In other words, A UN beuraucratic group is going to 'encourage' mining while supporting Zimbabwe's policies (which create more misery than cure) while encouraging mining in an environmentally friendly way (i.e. no mining at all) and this will supposedly help the poorer sections of Africa.
Insert sarcastic remark here...
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/28/2007 : 20:05:21
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Finally, a bit of good news for metals, price wise.
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Gold ends up almost $6, extends rise to after hours
Market focuses in on GDP figures, stronger oil, digests Fed's rate decision
SAN FRANCISCO (MarketWatch) -- Gold futures closed with a nearly $6-an-ounce gain Thursday, with a weaker dollar and strong oil prices helping the market break a three-session losing streak that's driven prices lower by nearly 2%.
Prices extended their gains into the electronic trading session late Thursday following a decision by the Federal Reserve to keep interest rates unchanged at 5.25%.
Gold for August delivery gained $5.60 to close at $650.40 an ounce on the New York Mercantile Exchange. In electronic trading shortly after the Fed announcement, the contract moved a bit higher to stand at $651.20 an ounce.
The contract closed at $644.80 on Wednesday, its lowest level since mid-January, after tallying a loss of $12.20 in three sessions.
"Supported by a hefty surge in crude-oil prices ... a stabilizing equity market, and a mild retrenchment in the U.S. dollar ... gold was seen as a reasonable short-term play by a number bargain hunters brave enough to enter the market on the day of Fed speak and after several declining sessions of quite some significance," said Jon Nadler, an analyst at Kitco Bullion Dealers.
After regular trading for gold futures closed Thursday, the Federal Reserve chose to hold its target for the key federal funds interest rates steady at 5.25%. The Fed isn't convinced that core inflation has dropped back into its target range for good, the central bank said at the end of its two-day meeting.
"I don't think today's decision gave the market a clearer picture of what's happening," said Thomas Hartmann, an analyst at Altavest Worldwide Trading.
"Key to this month's statement is that the Committee's predominant concern is that inflation will fail to moderate as previously expected," he said in e-mailed comments. "While higher inflation sometimes spurs the advance of the precious metals, the metals markets seem to be more concerned about economic growth. On that, the Fed sees continued moderate growth."
So, "while inflation pressures edge higher, economic growth may not keep up, and that is not a recipe for success for higher metals prices," he said.
A bargain?
Earlier Thursday, gold prices had climbed on "bargain hunting and physical buying after the sell-off earlier in the week," said analysts at Action Economics.
"Gold has traditionally been seen as a safe haven for investors, but more recently seems to have been put in the same category as other commodities and risky investments," they said in a research note.
Lately, traders, jittery over conditions in the U.S. and other economies, have been selling commodities in favor of safer assets such as Treasurys.
But Mark O'Byrne, director at Gold & Silver Investments Ltd., said that "the notion that the recent selling witnessed in gold is a flight to quality and away from risk will likely be proved incorrect in the fullness of time."
"Gold remains the world's only finite currency and the safe haven asset and this will be seen in the long term," he said in a note to clients.
Zachary Oxman, a senior trader at Wisdom Financial, said he believes that gold has, overall, been following the commodities markets as a whole, which has been seeing downside moves off the collateralized debt obligations securities, or CDOs, and overall market weakness.
The largest liquidation for commodities "has come off the back of a descent size unwinding of the carry trade as the [yen] and [Australian dollar] moved significantly higher yesterday off the [Bank of Japan] jawboning their currency higher," he said in e-mailed comments.
In currencies trading Thursday, the dollar lost ground against most major currencies....
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With more accessible gold trading, China’s global gold market role expands
Excerpt:
With trading of gold in China becoming ever more accessible, Mineweb analyst Rhona O’Connell examines recent developments which extend China’s position in the fundamental balance of the gold market.
China looks set to enjoy continued deregulation, with some banks now allowed to import gold into the country, and further integration into the international markets is well nigh inevitable.
The Chinese gold market continues its deregulation apace, with the latest announcement coming from the Shanghai Gold Exchange, that in early July it will launch individual gold bullion trading, via a partnership with China's Industrial Bank, to be followed by a partnership with Huaxia Bank and in all likelihood the Industrial and Commercial Bank of China....
.....The market has been evolving over the course of the decade. In August 2001 the State Price Bureau imposition of retain price controls was formally abolished and retail jewellers were allowed to set their prices according to weight and quality of the product for sale. At the end of March 2004 the People's Bank of China removed all barriers to gold licensing for manufacture, distribution and retail of gold jewellery products, with the gold content to be domestic. In May 2004, seven Chinese companies were allowed to import gold jewellery.
Chinese domestic jewellery demand has not increased markedly when taken on a ten-yearly basis; the figures from GFMS Ltd show that in 1997, Chinese fabrication of carat gold jewellery was 271 tonnes, before dropping to 190 tonnes in 2002. Consumption was estimated at approximately 340 tonnes in 1997, and falling to 200 tonnes, more or less, in each of 2001, 2002 and 2003. The 1997 figure was in fact something of an anomaly, driven in part by the development of currency turmoil in East Asia, which came to a head in 1998.
Jewellery demand since 2003 has shown healthy growth, driven in part by the marketing campaigns of the World Gold Council with their "K-gold" 18-carat jewellery campaign to complement the more traditional 24-carat jewellery pieces. Demand in 2006 is estimated at 245 tonnes, third behind India (522 tonnes) and the United States (309 tonnes), and taking up approximately 11% of total jewellery demand last year.
Meanwhile it is now legal for private individuals to purchase small gold bars, although this is still a very small market. In 2000, small bar purchases in China amounted to just seven tonnes; in 2006 the figure was 15 tonnes while the estimate from GFMS for the world Gold Council's Gold Demand Trends puts first quarter demand this year at eight tonnes. This is twice that of the equivalent quarter of 2006, driven partly but not wholly by the fact that this year is the year of the Golden Pig (or Boar), a year regarded as particularly auspicious for wealth, health and prosperity.
Taken as a whole Chinese gold fabrication in the year 2000 amounted to 213 tonnes or six per cent of the global total. In 2006 the figure was 269 tonnes or nine per cent of total.
As the demographic distribution of wealth develops then it is arguable that gold consumption has considerable scope for further increases in the coming years - provided, of course, that gold can beat off increasing competition from other areas for the attention of the "leisure renminbi".
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Maybe opinion, maybe fact, worth noting in either case.
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Chartists postpone bullion's return to highs
By Atul Prakash
LONDON (Reuters) - Heavy sell-offs in gold and silver have left the metals vulnerable to further sharp declines and may have put back their return to a longer-term bullish trend, technical chart analysts said.
"The moves that we have seen over the past couple of days have resulted in a chart picture deteriorating quite a bit," Karen Jones, head of technical analysis at Commerzbank, said.
"We are at a fairly critical juncture for the gold market. I think we can allow for a slide to around $630 an ounce and possibly around $626. Anywhere beyond there is going to make the chart picture change considerably."
Gold fell to a three-month low of $638.90 on Wednesday before rising to $644.90/645.50 by 0826 GMT on Thursday, compared with this year's high of $693.60 in April.
Silver slipped to a five-month trough of $12.11 this week, before a rally to $12.38/12.41 on Thursday, against this year's nine-month high of $14.72 in February.
Chart analysts, who predict future price movements by plotting past market performance, said this week's volatile movements had eroded gold's 18-month uptrend and broken the 200-day moving average of around $641.
Price support remained there and at around $636
Earlier support at $650 had become a heavy resistance barrier and any recovery to that level would attract plenty of buyers.
"Some short to medium-term things have changed because we have broken a pivot point within a broad range. In the past 12 months, we have been in a very rectangular trading range, with extremes above $700 and lows beneath $600," said independent analyst Cliff Green, referring to U.S. gold futures levels.
"That type of sideways activity is a preparation for the next big trend. I would still hold a fairly neutral stance on this."
A significant rise in gold and silver might not take place until next year against earlier expectations of late 2007, analysts said.
Gold surged to a 26-year high of $730 and silver rose to a 25-year high of $15.17 in May last year. Analysts earlier said the metals might breach those levels this year on a weaker dollar outlook and portfolio diversification by funds.
"Long term, I am still bullish. I thought we were probably heading towards new highs in the later part of this year. It now seems that it's probably going to be a 2008 story," said Robin Wilkin, technical analyst at J.P. Morgan.
SILVER MORE VULNERABLE
Silver had become more susceptible than gold to sharp declines after this week's sell-off as the metal has gone below key technical levels, analysts said.
"Silver is looking very heavy indeed. It broke below its one-year average and now is poised to test its low of the year at 12.03," said Phil Roberts, analyst at Barclays Capital.
"Below there you have got the weekly cloud base of around $11.96. And if you take out those two levels, that would indicate silver is headed substantially lower back towards
$10.50."
The so-called cloud base is a charting technique that is widely used by Japanese investors and is similar to moving averages. When prices fall below the cloud level, the trend turns.
This week silver broke the $12.40, an Elliott wave support zone, leaving the market open to deeper declines. Resistance was now located at $12.69 and then $12.90, analysts said.
The Elliott wave principle begins with the premise that collective investor psychology moves from positive to negative and then back again, creating identifiable swing patterns in market movements.
"If we turned from here and went back up through the $12.80-$12.90 area, then we are probably just developing a higher range between $12 and $14," Wilkin said.
.....While I will not speak ill of chartists, since they make many complicated calculations in trying to figure out the price of gold and silver, the attempt to predict future prices via charts is sometimes as effective as trying to predict future prices with a crystal ball or Tarot cards. Why something went up or down in price, the reason it went up or down in price, is much more important to me than the fact it went up or down.
What was the reason behind the move? Charts do not tell us that, they simply tell us what happened.
Charts are a useful tool, but I want more than just one tool in my toolbox when I have to repair something.
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Barclays Capital ups Q2, Q4 2007 copper price forecasts - (quote from article) "But Barclays cuts its forecasts for tin, aluminium and nickel prices in the third quarter on softening demand from China, although it revised up its fourth-quarter forecasts on an expected recovery in sentiment."
Russia lays claim to the North Pole - and all its gas, oil, and diamonds - "Russian leader Vladimir Putin has made an astonishing bid to grab a vast chunk of the Arctic, giving himself claim to its vast potential oil, gas and mineral wealth."
....(I wonder how Santa Claus feels about that move?)
Slash prices or I'll nationalise, warns Mugabe - "Zimbabwe President Robert Mugabe has threatened to nationalise all key private sector manufacturing and retail firms if they do not comply with his order to slash all prices by half. He also threatened to seize foreign-owned mines in Zimbabwe, which he accused of engaging in "dirty tricks" by extracting the country's minerals while externalising foreign currency needed in the economy." - (unlike many of the recent countries nationalizing mines, this could effect nickel)
...Maybe Mugabe the mugger will do for the mining industry what he did to agriculture of Zimbabwe, i.e. run it into the ground. Oh wait, he already did that with the gold mining industry.
Pension funds urged to invest more in commodities - "European pension funds should invest at least three to five percent of their portfolios in commodities, with some 10-20 percent of that actively managed, a conference heard on Tuesday."
UK watchdog steps up monitoring of commodity markets - "Britain's financial watchdog, the Financial Service Authority, is stepping up its capacity to regulate booming commodity markets, a senior executive said on Wednesday." -
....(If they are anything like their American counterparts, expect traders to fear nothing form a toohless watchdog.)
Indonesia news, Govt to propose two royalty schemes for new Inco contract - "The government intends to propose two distinct royalty schemes for inclusion in the contract of work (CoW) of nickel mining company PT International Nickel Indonesia (Inco), whose existing contract the government is determined to see renegotiated, a senior official says" -
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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Bullion news, views & thoughts #3
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