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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 04/18/2007 : 18:17:52
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Platinum hits 7-1/2 month high on dollar, ETF news
NEW YORK (Reuters) - U.S. platinum futures jumped 1.5 percent to a 7-1/2 month high on Wednesday, helped by a weak dollar and robust investment demand on the back of a planned launch of new exchange-traded funds.
At 11:41 a.m. EDT, most-active July platinum (PLN7: Quote, Profile, Research) trading on the New York Mercantile Exchange was up $18.10, or 1.4 percent, at $1,299.00 an ounce, the loftiest level since September 2006.
Last week, Switzerland's Zurich Cantonal Bank said it planned to launch exchange-traded funds (ETFs) based on platinum, palladium and silver from the next month, boosting investment demand
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Silver Junior news
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Nickel market in deficit in first two months
The global nickel market recorded a deficit of 19,000 tons during January and February 2007, the World Bureau of Metal Statistics said Wednesday, with reported stocks some 3,000 tons lower.
Mine production in January to February 2007 was at 253,100 tons, 14% above the 2006 total.
Refined production was 6% above the year-earlier total, with output increases in China, South Africa and Canada accounting for most of the higher output, WBMS said.
World demand was 42,000 tons higher than the previous year. No allowance is made in the consumption calculation for unreported stock changes, WBMS said.
In February, nickel smelter production was 113,800 tons and consumption was 127,000 tons.
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SUMITOMO METAL'S NEW STAINLESS STEEL TAKES HEAT AT 1,000 C
TOKYO, April 18 Asia Pulse - Japan's Sumitomo Metal Industries Ltd. (TSE:5405) has developed a type of heat-resistant stainless steel that can be used even at temperatures as high as 1,000 degrees Celsius.
Stainless steel resists rusting, but normally loses strength when exposed to high temperatures, so it is not currently used for important components in facilities like power plants.
Sumitomo Metal's new stainless steel employs an optimized mixture of auxiliary materials like nickel and chromium that boosts its strength at high temperatures without diminishing its resistance to rusting when exposed to steam. Its tensile strength comes to 12.8kg per square millimetre at 1,000 C - 40 per cent stronger than conventional heat-resistant stainless steel.
A subsidiary, Sumitomo Metals (Naoetsu) Ltd. will mass-produce the new material using existing facilities, obviating the need for additional equipment.
As a first product, affiliate Sumitomo Precision Products Co. will process the new stainless steel for heat exchangers that will be built into advanced humid air turbine systems for next-generation fossil fuel power plants.
Sumitomo Metal is also waiting to obtain certification for the material from the American Society of Mechanical Engineers for its use in the reformers of fuel cells.
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Kazakhstan reduces gold, silver output in Q1
18.04.07 – Kazakhstan produced 1,891 kg of refined gold and 181,561 kg of refined silver in the first quarter of 2007, respectively 8.8% and 6.4% less than in the same period of last year, a source at the National Statistics Agency told Interfax.
Production was also down 2.3% to 377,632 tonnes of alumina and 5.4% to 29,917 tonnes of unprocessed lead.
However, production of unprocessed zinc rose 1.1% to 94,373 tonnes, and output of refined copper in the form of billets (not including sintered, rolled, extruded and forged products) rose 16% to 106,818 tonnes
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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Metalophile
Penny Collector Member
USA
320 Posts |
 Posted - 04/19/2007 : 10:22:05
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Here's another use for silver - seeding clouds with silver iodide for rain/snowmaking. Seems the Chicoms are trying desperate measures to control the weather. Control freaks!
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Metalophile |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 04/19/2007 : 18:19:06
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Silver Junior News
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Cuba to supply over 10,000 tons of nickel to China in 2007
April 18, 2007 – Cuba is to supply more than 10,000 tons of nickel to China this year, said visiting Cuban Minister of Foreign Affairs Felipe Ramon Perez Roque on Tuesday.
In his speech at the China Institutes of Contemporary International Relations, Perez said Cuba is a reliable nickel supplier for China. By the end of 2006, Cuba had altogether provided nearly 30,000 tons nickel for China.
Cuba's nickel reserve currently stands at 14.6 million tons, which is the second largest in the world.
Perez said China has become Cuba's second largest trading partner, adding bilateral trade volume hit a record high of 2 billion U.S. dollars in 2006.
The two countries have maintained in-depth political dialogues, and conducted close cooperation in international organizations, the 42-year-old Cuban foreign minister said.
At present, more than 500 Chinese students are studying in Cuba, while 160 Cuban youth are studying in China.
Perez said he hopes these youth could contribute to cementing Cuba-China friendship in future.
According to him, the two countries had fruitful cooperation in health, tourism and agriculture fields. The first ophthalmological hospital jointly funded by Cuba and China has been set up in Xining, capital of northwest China's Qinghai province.
More two such hospitals will be launched in Hebi, a city in central China's Henan province, and Datong, a mining city in north China's Shanxi province, Perez said.
Perez arrived in the Chinese capital Sunday night on a four-day official China trip. During his stay, Vice President Zeng Qinghong and State Councilor Tang Jiaxuan will meet with him, respectively.
He also visited south China's Guangdong province and attended the opening ceremony of the Cuban consulate general there.
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Gold dips as China growth sparks rate fears
Gold futures dropped $5 an ounce Thursday to close at their lowest level in a week, as news of faster-than-expected growth in China in the first quarter triggered worries that the government will have to take measures to slow down its economy, reducing demand for metals.
Gold for June delivery finished down 0.7% at $688.30 an ounce on the New York Mercantile Exchange after a low of $682.50. These are the contract's weakest levels since April 12.
The metals had "a very negative session in Shanghai, where copper closed limit down," said Edward Meir, analyst at Man Financial, in a note to clients.
"Negative sentiment in Shanghai was fueled by talk that the Chinese may once again raise interest rates in light of reports that China's economy grew at a faster-than-forecast 11.1% pace in the first quarter of this year," Meir said.
In Asia overnight, stocks fell sharply Thursday, led lower by China's Shanghai Composite Index, which shed 4.5% on renewed concerns that rapid growth may lead to higher interest rates.
After the close of trading, Beijing's National Bureau of Statistics reported China's gross domestic product grew 11.1% in the first three months of the year, quickening from a 10.4% pace of growth in the final quarter of 2006.
Looking to oil
Metals traders have "looked to the energy sector for direction today," said James Moore, an analyst at TheBullionDesk.com, in a note to clients.
Crude-oil futures dropped to a level not seen since April 10 as traders worried about the potential for weaker Chinese energy demand.
The correction in gold prices Thursday, however, "comes as no great surprise considering the metal's lack of traction above $690," said Moore.
Silver prices also declined to a two-week low of $13.58 an ounce, with the May contract closing down 1.7%, or 24 cents, at $13.735.
"Currencies and oil presented a somewhat nebulous picture and oil retreated under $63 per barrel," said Jon Nadler, analyst at Kitco Bullion Dealers.
"Then, there is the problem (if one can call it that) of China's amazingly hot rate of growth," he said in e-mailed commentary. It has prompted "anxieties once again that the authorities will intervene in some manner to try to curb what could well become overheating."
A nearly 9% decline of the Shanghai index triggered a global markets sell-off in late February, which affected a number of asset classes, including metals. Most markets have since recovered from that sell-off.
European stocks also fell Thursday, following the declines in Asia, and U.S. stocks were headed for losses on Wall Street.
"We think that inflationary pressures are rising somewhat in China, and we hence believe that in 2007, the central bank will deliver at least two more hikes and possibly raise the reserve ratio," said Lars Rasmussen, analyst at Denmark's Danske Bank, in a morning note.
"We feel that the Chinese authorities will keep a tight grip on credit/money growth in 2007 compared to the expansion seen earlier."
Rasmussen also said that he expected the Chinese currency, the yuan, to appreciate at least 5% against the dollar.
On the currency markets, the yen climbed across-the-board Thursday, touching its highest level in more than two weeks against the dollar, after a sell-off in Asian stock markets overnight prompted investors to unwind carry traders.
Buy now?
Against this backdrop, the price of gold has climbed more than 150% since early 2001, so it's not surprising that many financial advisers and money managers are adding the yellow metal to their clients' portfolios. But whether that's also the right move for you depends on your taste for adventure.
John Person, president of National Futures Advisory Service, believes the current weakness in gold is a "strong" buying opportunity.
"The most important factor that may be the catalyst to push gold higher next week will be the Fed's Beige book report – this may show stronger business conditions throughout most of the feds reportable districts," he said in e-mailed comments. "That combined with good earning news and positive guidance from the majority of corporations during earnings season so far just might give gold bulls reason to not only hang on.
"Gold could spike sharply higher on evidence of continued strength in the economy from next week's reports and when you combine the fact that global stock prices are at or near multi and all time highs, it certainly will give good reason for inflation watchers to add gold to their portfolios," he explained.
For now, other metals prices were sharply lower, with the exception of platinum, whose July contract continued higher, closing up $2.90 at $1,309.80 an ounce, extending Wednesday's 2% gain. "The metal is being pushed along by anticipatory fever for the platinum-oriented [exchanged-traded fund]," said Nadler.
Sister metal palladium saw its June contract decline $2.80 to end at $380 an ounce.
May copper fell 3.25 cents to close at $3.5865 a pound after losing 1.6% in the previous session.
Copper prices climbed near a one-year high on Tuesday. Talks between Freeport-McMoRan Copper & Gold's (FCX) Indonesian affiliate and a labor group over the group's demands for higher wages. Freeport's Grasberg copper and gold mine is operating while talks continue, a spokesman told Dow Jones Newswires.
On the supply side, gold inventories were unchanged at 7.61 million troy ounces as of late Wednesday, according to Nymex data. Silver supplies were unchanged at 128.2 million, while copper inventories fell by 22 short tons to 35,624 short tons.
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ETF Securities to launch exchange-traded precious metals on LSE
ETF Securities plans to launch five new physically backed exchange-traded precious metals commodities to be listed on the London Stock Exchange, the company said Thursday.
Four separate classes of metals securities are to be listed: physical platinum (LSE code PHPT); physical palladium (LSE code PHPD); physical silver (LSE code PHAG) and physical gold (LSE code PHAU) plus a precious metals basket (LSE code PHPM).
First dealings in these securities are expected to begin on the main market of the LSE on April 24, ETF said.
"Our decision to launch this range of precious metals is twofold. Firstly, it comes in the wake of successful and increasing global demand for precious metals through ETCs which have seen steady growth over the last four years to over $16 billion," said Graham Tuckwell, ETF chairman, in a statement.
"Secondly, we want to offer investors exposure to a broad range of precious metals which have historically been extremely difficult to access," he added.
All of the new ETCs are backed by physical allocated metal held by the custodian HSBC; all physical metals held with the custodian must conform to the rules for good delivery of the London Bullion Market Association and London Platinum Palladium Market.
While ETF does not forecast the likely take-up of such products the expectation is that the platinum product would grow to around $100 million within 12 months, equal to around 80,000-100,000 oz of platinum, Nick Bienkowski, ETF's head of listings and research, told Platts.
This is likely to be a gradual process, he said.
"What we've seen in our gold and silver products to date is that they have attracted sticky investors and the assets have gradually built," he said.
The ETF announcement follows news last week that Zurich Cantonal Bank is to launch three exchange-traded funds in silver, platinum and palladium, respectively, in May.
"It was going to happen, whether it was ZKB or us," Bienkowski said. "As long as it's being done by someone who has done it before investors in the market can be sure it's being done properly."
ETCs are open-ended securities which can be created or redeemed on demand (by market-makers) provided that the relevant amount of metal is delivered to the custodian, ETF said. Investors can buy and sell the new ETCs through regulated brokers or approved market makers. ETCs can be traded with all the same order types available to equities, including market, limit and stop orders. They can also be shorted through stock borrowing or CFDs.
The minimum trade size is one security and settlement is T+3 (trade date plus three business days). In addition, this is the first time that physically backed precious metal ETCs have been eligible for UK pension accounts including PEP, ISA, CTF and SIPP, the company said.
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Domestic demand for gold waning
Mumbai April 19 Domestic gold demand has been hit by rising interest rates, which have made investible funds expensive, while a strengthening rupee has made gold imports cheaper, notwithstanding strong international prices.
The Indian bullion market generally takes its cue from international prices. There is demand compression as a result of high and volatile prices, according to traders.
Gold imports by India were down 10 per cent (68 tonnes) to 679 tonnes in 2006 compared to 747 tonnes in 2005, according to data from GMFS, the leading precious metals consultancy firm.
(India is the world's largest consumer and importer of the precious metal.)
The average local prices rose by 38 per cent to Rs 8,916 for 10 gm in 2006, from Rs 6,455 in 2005, the data showed.
"Compared with this time last year, domestic demand for bullion is almost 30-40 per cent lower in Mumbai," said Mr Prithviraj Kothari, Director of Riddhi Siddhi Bullion. Last year, demand was more than 1,000 kg a day.
This has now fallen to 200-300 kg on an average, he added.
Festival demand had briefly generated interest a few days ago, but it is waning now.
It is believed that rising interest rates have encouraged investors to opt for fixed deposits that earn 10-11 per cent annual returns.
Gold prices are already ruling at very high levels and therefore, may not give returns as high as fixed deposits, said Mr Kothari.
On the other hand, while a weak dollar provides positive support to gold, a strong rupee keeps domestic prices in a tight range, and therefore, curbs higher returns.
Recent appreciation of the rupee (to 41.91 against the dollar) means a muted price performance by gold in the domestic market, contrary to the strong bullish international trend.
Globally, commodity investors are eyeing the new psychological mark of $700 an ounce. Gold peaked at $691.40 on Wednesday in the London spot market.
Prices are expected to range between Rs 9,350 and Rs 9,500 for 10 g, Mr Kothari added.
If the rupee were around 44 against the dollar, gold prices would have been well above Rs 10,000 for 10 g, said Mr Bhargav Vidya of B.N. Vidya & Associates.
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Slow start to the gold rush
Higher price of gold and interest rates appears to have made a dent into the profits of jewellers in the city, who thought that they could do a roaring business this year too on the Akshaya Tritiya day on Thursday and Friday. Jewellers in the city made a business of about Rs.25 crores on the Akshaya Tritiya day last year. After a gap of 70 years, the festival was being celebrated for two days, starting from Thursday.
Despite creating a lot of hype, jewellers could not catch the attention of many customers on the first day. Barring a few big players, not many jewellers could register encouraging sales till the evening. The city has more than 200 jewellery shops, including petty jewellers and traders, according to an estimate of the Vijayawada Gold Jewellers and Bullion Traders Association.
Association president K. G. N. Prasad said that the business was `dull' till afternoon on the first day. He, however, hoped sales would pick up by evening.
Big players like Anjaneya Jewellers, Mohammad Khan, Khazana, Chandana and Keertilal apparently remained unscathed by any of the negative factors. Some of these jewellers expected to make a business of about Rs. 1 crore during the two days. They pointed out that customers who could spend Rs. 3 lakhs to Rs. 4 lakhs would not be deterred by the high prices. More than the price, sentiment held the key, they maintained. Jewellery shops also introduced pre-booking facility for `big customers', who were ready to purchase items worth lakhs of rupees. These pre-bookings were estimated to constitute about 25 per cent to 30 per cent of the total sales.
Anjayneya Jewellers proprietor Vadlamudi Venkat Rao expressed confidence that the business would be attractive this year too, as the festival was being celebrated for two days. "Sales will double this year compared to last year," he opined.
.........(I view overseas news about gold much the same way scientists view the butterfly effect, one small change on the other side of the globe will effect everything else, either large scale or small.)
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More views than news, but worth considering
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Investors warm up to gold funds
The yellow metal in paper form may not be too popular yet. Indians, the biggest consumers of gold on the planet, still prefer it in the form of jewellery, or at best coins or biscuits. But paper too is getting there. Come Tuesday, UTI Mutual Fund's gold exchanged traded fund (ETF) is set to list on the National Stock Exchange, and its principals are optimistic.
ETFs cannot be worn around the neck or the finger, but as an investment option, they make sense - holders can buy and sell them like any mutual fund unit, priced at one gram to a unit, without worrying about quality, security or storage. Demat (dematerialized) accounts are a must to buy gold ETFs. Simrat Saluja, a customer care executive, finds the gold ETF ideal, and has put in Rs. 10,000, a tiny amount for traditional gold investors. "It is the only transparent way to save yourself from cheating in gold buying. And the other thing is that I won't have to pay locker charges in this scheme," she said.
Mutual fund officials say the two gold ETFs launched so far, the Benchmark ETF and UTI Mutual Fund's ETF, have drawn enthusiastic response. About 41,000 investors have so far applied for the gold ETFs, and have pumped in Rs 235 crore between them. An NSE listing that reflects the Net Asset Value (NAV) of a unit is the clincher. Investing in gold can now be as easy as calling your broker, not visiting your jeweller. Benchmark's gold ETF listed on March 19, after its new fund offer received 15,000 applications and around Rs. 100 crore.
Rajan Mehta, Executive Director, Benchmark Asset Management Company, says, "After listing we have seen many new investors coming into the fund and many existing investors adding extra units. Another impact is that the trading has been orderly after listing and the real time price quoted has been in line with the NAV." But no one expects a fast scale-up. "We expect that the gold ETF being a new concept would take a little time before it kicks off," said A.K. Shridhar, investment manager at UTI fund. "Over the next two years, we expect gold to emerge as a strong asset class and the gold ETF as an efficient manner to have the asset class in your portfolio".
Old-world jewellers don't think that gold ETFs have affected their business. "We don't find any change in the gold business whether it's jewellery or biscuits purchasing for investment. As India is big country of wide population with different mindsets, there is a large number of people who prefer to store gold in material form rather than in papers," said Pawan Gupta, managing director of Delhi's P.P. Jewellers.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 04/19/2007 18:37:17 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 04/20/2007 : 19:13:42
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Platinum ETFs set to drive prices to highs
LONDON (Reuters) - The launch of exchange-traded funds (ETFs) in platinum is set to upset a fragile market balance and prices, already supported by strong industrial demand, are bound to hit new record highs, analysts say.
Prices jumped this week after London-based ETF Securities and Zurich Cantonal Bank announced plans to launch ETFs, with platinum hitting a five-month high of $1,329 an ounce on Friday, moving closer to last year's record peak of $1,395.
ETFs are listed on stock exchanges and offer investors exposure in the underlying commodity without taking physical delivery. Sponsors of such funds buy a matching amount of the commodity and keep it in bank vaults.
Inventories have been largely drawn down on the market and that means that you don't have a lot of stocks that you could simply shift to the ETFs," said Michael Widmer, director of metals research at Calyon Corporate and Investment bank.
"The ETFs would add some extra demand which hasn't been there. That means prices will remain well supported and can go up further. We might set a new record high."
Analysts said the platinum market might close the current year in deficit for the ninth year in a row, with the ETFs dashing hopes of a balanced market in 2007.
The market ended 2006 with a deficit of 20,000 ounces as demand of 7.02 million ounces outweighed supply of 7.0 million.
The Zurich platinum fund expects volume of 70,000 ounces in its first year and ETF Securities hopes to accomeulate 76,000.
Should similar products be launched on other exchanges, the volumes tied up by ETFs would become significant, said David Holmes, director of precious metals sales at Dresdner Kleinwort Investment Bank.
DWINDLING STOCKS
World stocks have been falling because of strong demand from the autocatalyst sector, which uses platinum to clean vehicle exhaust fumes. Stricter emission norms have also been boosting consumption.
Switzerland is the clearing centre of the over-the-counter platinum and palladium market and UBS Investment Bank said it believed most of the world's stocks of platinum were held there. At the end of February, Swiss stocks were estimated at 865,000 ounces.
"We do not believe there are substantial stocks of platinum outside of Switzerland," John Reade, head of metals strategy at UBS, said recently.
He said each 100,000 ounces of investment in ETFs might lift platinum price by $40 an ounce.
Platinum demand for autocatalysts jumped to 4.38 million ounces in 2006, up nearly 15 percent from the previous year, while consumption in the chemicals and electronics sectors rose by 12 percent to 770,000 ounces.
"The risk to the platinum market from an ETF is that skyrocketing prices will push industrial users to find alternatives," said John Meyer, analyst at Numis Securities.
Even if platinum prices then fell, consumers might find it hard to switch back to the metal, he said.
Platinum is the best suited metal for diesel autocatalysts. Technologies have been developed to use palladium, but they are not yet popular. Jewellers have also been shifting to palladium.
OPPOSITION
Leading platinum producers, distributors and market players worry that the market impact of ETFs might damage long-term demand.
"It's definitely not good news," said Bob Gilmour, manager of investor relations at miner Implats (IMPJ.J: Quote, Profile , Research), adding Implats had little metal for the spot market as most of its platinum was supplied through long-term deals.
South Africa's Anglo Platinum Ltd (AMSJ.J: Quote, Profile , Research), the world's largest platinum producer, and Implats, the second-biggest, account for about 70 percent of world platinum supply.
Trevor Raymond, senior manager at Anglo Platinum, said the company would not supply metal directly to the funds.
"In principle, we are opposed to ETFs because of the upward impact on price and the damage to long-term growth of demand for the metal," he said.
"Platinum prices have done well over the last eight years. Pure demand-supply fundamentals have been driving the market and producers would like to keep it that way," said Jon Bergtheil, global metals strategist at J.P. Morgan.
"What they don't want to see is platinum running up to $1,600 an ounce and then collapsing to $900."
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Zimbabwe news
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ALL gold mines this week stopped processing gold due to an acute shortage of foreign currency needed to import cyanide, a key chemical in bullion production.
Miners said the Reserve Bank of Zimbabwe had failed to pay them gold delivered since October last year.
Almost all major mines have closed their production mills because they have run out of foreign currency to import essential chemicals. By Wednesday Isabella Mine, Muriel Mine, Forbes & Thompson and the Canadian-owned Blanket Mine had shut down their plants while underground mining had also been reduced by more than half.
Metallon Gold Zimbabwe, the producer of half of Zimbabwe’s gold, had by yesterday shut down its plants due to lack of cyanide. Metallon owns five mines, namely Arcturus Mine in Goromonzi, Mazoe Mine in Mazowe, Shamva Mine, How Mine in Bulawayo and Redwing mine in Mutare.
Group chief executive Collen Gura confirmed that all the five mines under Metallon had stopped processing gold.
"I can confirm that our five mines have stopped processing gold due to lack of foreign currency to import cyanide. We have not been paid by the Reserve Bank," said Gura.
Metallon, which employs 5 000 workers, has also sent its contract workers home due to the crisis.
"It’s not a protest sign but there is nothing we can do because we just don’t have the foreign currency required to get the key chemicals. Our suppliers are saying they need cash," Gura said.
In his Independence Day address on Wednesday President Mugabe lashed out at the rampant smuggling of precious metals such as gold which, he claimed, was resulting in forex losses.
Gold mines are supposed to receive 67% of their gold sales in foreign currency while the remainder is paid in Zimbabwe dollars at a price of $16 000 a gramme. However, since October they have not received either the foreign or local currency component for gold delivered to the central bank. The regulations state that miners are supposed to be paid half their monies within four days and the remainder within 21 days of gold deliveries.
It is estimated that gold mines are owed US$15 million by the central bank. The crisis is already reflecting in total gold production figures.
Latest figures show that Fidelity Printers and Refiners received less than 700kg of gold in March. It is estimated that deliveries for April could be as low as 500kg.
Gold miners say their efforts to engage the central bank have not been fruitful. Urgent sectoral meetings have been held and SOSs sent to the central bank and government but no action has been taken.
At one such meeting on April 11, mining companies told the Ministry of Mines and Mining Development that they could not continue operating under the current situation.
The Zimbabwe Chamber of Mines told the ministry that some of them were already sinking in debt.
"The gold sector over the past few months has been surviving on available stocks and borrowings, which for some companies is in excess of $1 billion a month," said minutes of the meeting.
The chamber said some of its members were surviving on "lines of credit and leveraging on existing relations with fellow mines and suppliers".
"Existing stocks have run out, suppliers are now insisting on cash upfront before goods are delivered, even some banks are no longer willing to continue to offer loans to gold producers who are not servicing their debts." Gold mines want the support price of gold to be reviewed to about $450 000 per gramme. Central bank governor Gideon Gono could not be reached for comment but is expected to make an announcement on the issue in an interim monetary policy statement scheduled for the end of this month.
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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 - 04/24/2007 : 18:17:51
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Gold futures suffer sharp decline as oil prices drop
Source: MarketWatch
Gold futures closed Tuesday near their lowest level in two weeks as a hefty decline in oil eased inflation fears and dampened the market for the precious metal, which has failed at its attempts to touch the key $700 level.
"Support thus better hold at $685 for gold, or a reversal better take place before some nervous fingers pull the profit-taking trigger and give everyone else in the bull camp indigestion," said Jon Nadler, an analyst at Kitco Bullion Dealers.
On the New York Mercantile Exchange, gold for June delivery closed down $6.50 at $687.70 an ounce. That's the contract's weakest closing level since April 12.
On Monday, the contract closed down $1.60 an ounce. It touched a high of $698 on Friday, its highest intraday level since Feb. 27, but hasn't climbed past $700 since May of last year.
The retreat reflected weakness in crude futures. Crude prices dropped below the $65-a-barrel mark, retreating from a one-week high they saw earlier in the session as traders readied for Wednesday's data on U.S. petroleum supplies.
Weakness in the U.S. dollar failed to provide any support to gold. The dollar approached an all-time low against the euro after reports showed sales of U.S. existing homes saw the largest percentage decline in 18 years last month while consumer confidence dropped more than forecast in April.
Existing home sales plunged 8.4% in March to 6.12 million, the lowest in nearly four years, the National Association of Realtors reported. It was the largest percentage decline in sales since January 1989.
Separately, the Conference Board said the consumer confidence index fell to 104.0 in April from a revised 108.2 in March, against expectations for a decline to 104.9.
"Conditions are still leaning towards the overbought side of the trading equation" for gold, Nadler said in e-mailed comments. But "concerns remain elevated about U.S. economic conditions, plagued as they are by the sub prime crisis and several other pockets of weakness."
Silver roll
Other metals prices finished lower along with gold. The May silver contract fell 1.9%, or 26.8 cents, to close at $13.782 an ounce.
"Precious metals are going to be data-dependent this week with some market-moving reports out from the U.S. government," said Neal Ryan, director of economic research at Blanchard & Co., in a morning note.
"One thing to keep an eye on, however, are the trades just before the contract expiration for silver on Wednesday," he said. "Silver will roll forward to a new month contract that day and there could be some significant price activity before and after, as traders jockey for position into the front month contract."
Ryan predicts gold prices will continue to rally and could reach $800 by year-end.
July platinum fell 1.5%, or $20.20, to close at $1,311.50 an ounce, while June palladium fell $8.40 to end at $379 an ounce. May copper lost 2.2%, or 8 cents, to close at $3.5525 a pound.
"One of the two recently announced platinum [exchange-traded funds] launched today in London and is experiencing some very positive investor interest," said Ryan. "The second platinum ETF, on the Swiss bourse, is set to launch some time before May 10th."
"Time will tell how these two ETFs impact the market," he said. But "one thing that is certain: this will be a new impact on the demand side of the market that platinum (and palladium) have not previously experienced."
On the supply side, gold warehouse stocks rose by 67,222 troy ounces to stand at 7.68 million troy ounces as of late Monday, according to Nymex data. Silver supplies rose by 71,126 troy ounces to 131.2 million troy ounces, while copper supplies fell to 35,064 short tons, down 123 short tons.
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Gold, Silver Fall as Oil Drop Curbs Demand for Inflation Hedge
By Pham-Duy Nguyen
April 24 (Bloomberg) -- Gold and silver fell the most this month in New York as a drop in prices for oil and other commodities reduced the appeal of precious metals as a hedge against inflation.
Oil fell as much as 2.7 percent and the Reuters/Jefferies CRB Index of 19 commodities lost the most in more than six weeks after a drop in home sales sparked speculation an economic slowdown in the U.S. will curb demand for raw materials. Some investors buy gold to hedge against accelerating prices, helping to push the metal up 8.8 percent this year before today.
``There's some selling around the oil drop and the housing numbers,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. ``If there's an economic slowdown, it's going to hurt commodities and gold, too.''
Gold futures for June delivery fell $6.50, or 0.9 percent, to $687.70 an ounce on the Comex division of the New York Mercantile Exchange, the biggest drop since March 23. The price failed for a second day to challenge last week's peak of $698.
``Gold is facing stiff resistance as it heads toward the big number of $700,'' said Tom Hartmann, commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California.
Losses accelerated after gold dropped below $691, said Steve Phillips, a trader at Eagle Futures Inc. in New York.
``Everybody knew gold was too high,'' he said. ``There are a lot more sellers than buyers at these prices.''
Long Positions
Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended April 17, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 135,358 contracts on Comex, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 22,402 contracts, or 20 percent, from a week earlier.
Consumer confidence and existing home sales trailed forecasts, reviving concern about a slowing economy. Americans' confidence slumped to the lowest in eight months and sales of previously owned homes fell in March to the lowest level in almost four years.
Silver, a precious metal with industrial applications in medical devices and batteries, fell the most since March 2 as copper used in pipes and wiring slumped as much as 3 percent.
``Silver came off on copper,'' said Frank McGhee, head metals trader at Integrated Brokerage LLC in Chicago.
Silver for May delivery fell 26.8 cents, or 1.9 percent, to $13.782 an ounce on the Comex. Before today, the price had gained 8.6 percent this 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 - 04/26/2007 : 19:14:26
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Speed bump for metals this week.
Well, if things went up too fast too soon we would be priced out of the market.
Buying opprtunity as the weak hands let go of the shiny prize.
....Just thought of something, though not really metals news, more like views.
The price of metals has declined from its high of a few weeks ago and the know it alls on wall street will be predicting the end of the commodity bull,
The price of housing is down from a year ago and he wall street types are saying there will be better housing sales next year, the housing market has to come back up.
Anyone want to bet they will be wrong on housing and metals?
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Platinum, Palladium Fall as Dollar's Gain Erodes Metals' Appeal
By Halia Pavliva
April 26 (Bloomberg) -- Platinum fell in New York as the dollar rebounded against the euro and other major currencies, eroding the appeal of the precious metal as an alternative investment. Palladium also dropped.
The price of platinum headed a weekly loss, snapping a rally since early March. The dollar climbed from the all-time low against the euro as investors pared bets on an extended decline. Initial demand for an exchange-traded fund backed by platinum may have trailed estimates, said Patrick Chidley, an analyst with Barnard Jacobs Mellet LLC in Stamford, Connecticut
The metal's decline is probably ``related to a stronger dollar,'' Chidley said.
Platinum futures for July delivery fell $11.20, or 0.9 percent, to $1,306 an ounce at 10:22 a.m. on the New York Mercantile Exchange. The price has dropped 2.6 percent this week. The metal gained 11 percent in the previous six weeks.
Palladium for June delivery fell $7.05, or 1.8 percent, to $376 an ounce. The price has dropped 3.2 percent this week.
The metals may rebound on renewed demand related to the exchange-traded fund, which make it easier for retail investors to buy platinum, analysts including Chidley said.
``I do believe that existence of those funds is very good for the demand,'' he said.
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Copper Slides With Gold, Silver on Profit-Taking
April 26, 2007 - 3:56 p.m.
NEW YORK (AP) - Profit-taking helped drive copper futures sharply lower Thursday, even though traders continue to monitor a strike threat in Peru, which could increase prices. Gold and silver also fell on profit-taking.
The most-active July copper contract settled down 9.65 cents at $3.5090 per pound on the New York Mercantile Exchange. The metal was also whacked lower on the London Metal Exchange on fund liquidation.
"I really do think this is profit-taking," said Catherine Virga, base-metals analyst with CPM Group. "People are locking in some of the gains seen in the (recent) recovery."
The market may still be reacting some to the softer housing data seen in the U.S. earlier this week, she added. Yet, the severity of the decline suggests mainly profit-taking, she continued.
"I think we could have prices bounce back because of the potential strike in Peru," she added.
June gold settled down $9.40 at $678 a troy ounce. July silver settled down 44.2 cents at $13.455.
George Gero, vice president with RBC Capital Markets Global Futures, reported Thursday morning that some of the recent strength in equities may have impacted gold.
July platinum settled down $13.60 at $1,303.60 an ounce, while June palladium settled down $9.65 at $373.40 an ounce.
Spot gold at 1:31 p.m. ET traded at $675.05, down $11 an ounce.
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Norilsk Nickel announces preliminary production figures for first three months
Mining and Metallurgical Company (MMC) Norilsk Nickel announced preliminary consolidated production figures for the first quarter of 2007. According to the company's press service, Tav Morgan, Deputy Director General of MMC Norilsk Nickel stated that the company fulfilled its first quarter metals production plan.
The total production volume was: 61,000 mt of nickel, 101,000 mt of copper, 716,000 oz (22.3 mt) of palladium, and 169,000 oz (5.3 mt) of platinum for the first three months of 2007. After the acquisition of OM Group's nickel business on March 1, 2007, Norilsk Nickel increased its expected own nickel production in 2007 from 240,000-245,000 mt to 270,000-275,000 mt.
The expected production of copper, palladium and platinum remains unchanged: 404,000-409,000 mt of copper, 3.00-3.05 m oz (93-95 mt) of palladium and 700,000-710,000 ounces (around 22 mt) of platinum.
The stated production volumes do not include production figures of Stillwater Mining Company, Norilck Nickel's affiliated company.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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psi
Penny Collector Member
Canada
399 Posts |
Posted - 04/26/2007 : 20:09:14
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| Silver prices over the past year seem to gain at almost a fixed rate with a readjustment that happens at very regular intervals. Seems very useful for timing a purchase. Gold appears to be followin similar patterns more recently. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 04/27/2007 : 19:22:31
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A little bad news for gold (price wise) and the experts are ready to condemn the yellow metal as junk
A little good news for gold (price wise) and the experts can't say enough good things about the "king" of metals
(Experts, Bah, Humbug!)
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Gold, Silver Rise After Dollar Touches Record Low Against Euro
By Pham-Duy Nguyen
April 27 (Bloomberg) -- Gold rebounded from the lowest in two weeks after the dollar touched a record low against the euro, increasing the appeal of the precious metal as an alternative investment to the U.S. currency. Silver also rose.
Gold is sold in dollars and five of the past six bear markets in the U.S. currency have led to a higher gold price. Before today, gold had gained 6.3 percent this year while the euro had risen 3.1 percent against the dollar.
``With the dollar's decline to a new low, gold should move toward its recent highs,'' Marty McNeill, a trader at R.F. Lafferty Inc. in New York, said today.
Gold futures for June delivery rose $3.80, or 0.6 percent, to $681.80 an ounce on the Comex division of the New York Mercantile Exchange. The price fell 1.4 percent yesterday to the lowest close since April 9.
Silver for July delivery rose 12 cents, or 0.9 percent, to $13.575 an ounce on the Comex. The metal has gained 5 percent this year.
The dollar dropped to a record low of $1.3681 today after the U.S. Commerce Department reported that the economy grew at an annual rate of 1.3 percent last quarter, the slowest pace in four years.
Gold has moved mostly in tandem with the euro since the currency began trading in January 1999. The euro has had four annual gains since 2001 compared with six for gold. The 13- nation currency debuted at about $1.17.
`Spill Over'
``The weakness in the dollar will eventually spill over into gold,'' said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``Some of the central banks have been active in adding gold to their reserves at the expense of the dollar.''
Russia's central bank, the 13th-largest holder of gold, increased holdings by 3.8 percent to 12.4 million ounces in 2006, according to the International Monetary Fund. Central banks of Kazakhstan, Belarus, Tajikistan, Suriname and Ukraine also increased their holdings.
Gold still fell for the first week in eight and some investors were reluctant to buy after it failed to breach $700, some analysts said. The price reached an 11-month high of $698 on April 20.
``Gold just needs a little correction,'' said Billy Flahive, a trader at Eagle Futures Inc. in New York. ``I'd start buying at $665.''
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News on silver junior (a component of stainless steel, in case you forgot or are a newbie)
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No End In Sight For Nickel Strength
27/04/2007 By: Greg Peel
2006 saw an interesting development in the global nickel market. As prices surged to new, previously unthought of highs, a new market developed in "direct shipping laterite ore" which actually had the effect of reducing the 2006 deficit below that which had been previously anticipated.
But even this had little effect on the price.
Nickel ore is found globally in two major forms – sulphide and laterite. Laterite is exceedingly more abundant at 72% of known resources, yet sulphide represents 58% of nickel production.
This is because nickel laterites suffer from complex mineralogy, notoriously low grades and very high processing costs. Laterite mining has a history of longer-than-expected production ramp-ups and cost overruns.
On average, one hundred tonnes of laterite ore needs to be mined and processed to produce one tonne of nickel.
Because of the high cost of laterite processing, smaller miners have previously not bothered with this abundant source as the cost exceeded the potential revenue.
But now that the nickel price is in excess of US$23/lb, laterite ore can be processed commercially. Smaller miners do not have to invest in expensive processing plants. Instead, they simply ship the ore and sell it to supply-starved plants that have this capacity already. The high cost of shipping so much ore still falls short of prices achieved.
Thus we now have a market in "direct shipping" laterite ore. Most of 2006's supply came from the Philippines and New Caledonia.
Canaccord Adams had previously predicted a global nickel deficit of 50,000t in 2006, but the end result was 28,000t due to the laterite invasion.
If there's a lot more of this stuff lying around, then one could assume the nickel price will soon come under threat.
Nearly all of the world's major currently proposed greenfield projects are laterite.
However, Canaccord is not assuming this to be the case.
Were the nickel price to slip below its current levels, laterite mining, due to its high costs, would be the first to cease.
Thus there is still a price support mechanism.
Canaccord estimates global nickel supply reached 1.34mt last year, representing a 4% increase. Demand reached 1.37mt, for a very strong consumption growth of 7.4%. And we all know where that came from.
While the Western world increased its nickel consumption by 4.4% in 2006, which was a stark rebound from the 4.7% fall of 2005, Chinese consumption increased by a ridiculous 25%, exceeding even the ridiculous figure of 23.5% in 2005. The major driver all round was a 12.4% increase in global stainless production. Global inventories at the end of 2006 had fallen, on Canaccord's estimates, to a very low 86,000t, or 3.3 weeks of consumption.
For 2007 Canaccord sees supply growth of 7.2% to 1.44mt, bolstered by direct shipping laterite ore. Consumption is expected to be 1.45mt, representing growth of 5.9%. China will contribute 17.4% and the Western world 3.5%. The deficit will fall to 13,000t, but available nickel inventories will fall to 73,000t or 2.6 weeks of consumption.
As we progress into time,
Canaccord still cannot see supply outstripping demand.
2008 should bring 1.49mt of nickel but consumption will 1.52mt. The supply figure includes delays to Inco's giant Goro project and BHP Billiton's (BHP) Ravensthorpe project, still offset by direct shipping laterite ore. Inventories will fall to 45,000t or 1.5 weeks. This will be considered critical.
By 2009 several new projects should have started up, but tightness will remain. Production will reach 1.56mt and consumption 1.59mt. Following the Beijing Olympics Chinese consumption growth will fall to 9.6%. In theory, at this point all available nickel inventories will have been consumed. If there are no stocks available, says Canaccord, then only a high price for nickel can reduce demand.
Thus the implication is that significantly high nickel prices will be required through to the end of the decade in order to reduce forecast consumption levels in line with available inventories.
As far as the supply side is concerned, the biggest barrier is rising costs. These costs stem from a lack of engineering talent, higher contractor rates, and higher equipment and material costs.
They were always a barrier, but they are now becoming prohibitive.
Estimates suggest the cost of new nickel capacity has risen to US$18/lb, representing an average project scope of US$1.8bn, and it can only rise further.
At some point, the cycle will finally cool off, notes Canaccord. Most resource analysts still assume a long term nickel price of US$5.00-5.50/lb. But that seems a long way off at present, and many greenfield projects will likely be delayed until such time as costs become less prohibitive (thus only extending the delay).
Adding to the likelihood of extended high prices is consolidation in the market.
Four companies –
Norilsk Nickel,
CVRD,
Xstrata
and BHP Billiton (BHP) –
control 48% of the global mined nickel market and 56% of the refined market.
This compares to global aluminium, copper and zinc where the top four producers only represent 35%, 31% and 23% of their respective markets. (This is explained to some extent by the fact that global nickel production is about 1.4mt, compared to 34mt, 17mt and 10mt for the other metals).
Canaccord suggests that this level of control in the nickel market will ensure a level of "discipline of supply". Usually when metal prices run up there is a rush to start new projects which ultimately leads to oversupply and price collapse.
There is no advantage in the big four rushing out their new projects quickly, lest they see the nickel price subside. Already both CVRD and Xstrata have pushed back start-up dates for major projects.
And the demand side will still be all down to China. In 2000, China's nickel consumption increased by 50% to hit 65,000t, or 5.8% of global consumption. Consumption growth has not quite been so staggering since, but in 2006 China consumed 250,000t of nickel or 18.3% of global consumption. Over 2000-06, China's stainless steel production has increased from 524,000t to 4.8mt. Unless it suffers a spectacular economic collapse, China is expected to be consuming over 400,000t of nickel per annum by 2010.
It is going to take an extremely high nickel price to curtail nickel consumption, says Canaccord.
In the longer term – 2012 and beyond – Canaccord still believes the outlook for nickel remains "extremely encouraging". The current slate of greenfield developments should be easily absorbed by the market given there appears no end in sight to China's insatiable appetite. The high cost of ramp-up will also place a dampener on supply, including from laterite sources. And industry consolidation will ensure supply cannot get out of hand anyway.
...(Looks like silver junior has a long ways to go before its price starts to decline, maybe a decade, give or take a year.)
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Rolls-Royce says no alternative to high-cost metals
TALLINN (Reuters) - Prices of aerospace metals nickel,
cobalt and rhenium are at their highest for years, but engine makers have little choice but to carry on buying them, Rolls-Royce <RR.L> said on Thursday.
These raw materials have special properties which mean they cannot easily be replaced in aircraft engines, though their cost has surged recently, Leon Grabowski, Sourcing Specialist at the firm said.
"Once it is designed, tested, flown in, it's almost impossible to take it out," he said.
He was not able to give a figure for the impact of higher raw materials costs on Rolls Royce's bottom line, but said the firm needed to be sure it had a stable supply of the metals it uses.
"I'm more concerned with delivery than price," he said, referring particularly to scarce metals such as cobalt, rhenium and tantalum.
Cobalt prices have doubled to around $30 per lb in the past year, while nickel hit an all-time high of over $50,000 per tonne this week.
Nickel, which is mined by companies such as Xstrata, CVRD and Norilsk, makes up more than half of a new aircraft engine, Grabowski said.
Rolls-Royce was trying to deal with price spikes and volatile metal markets by signing long-term contracts with producers either at a fixed price or a capped price, or by buying up metal to keep in stock for the future.
"The challenge is to have a strategic relationship with more than a single supplier," he said.
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copyright/courtesy - Dow Jones Newswire - "LME nickel jumps on technical and speculative buying after buy-stops were triggered as prices pushed through the 20-day moving average, says LME broker. Next upside target for nickel is seen at $48,000/ton and then $50,000/ton, broker adds."
same link, different information...
Nickel May Surpass $55,000 a Ton This Year, Standard Bank Says - "Nickel prices may surpass this year's record as supplies of the metal used to make steel resistant to corrosion lags behind demand, Standard Bank said."
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It had to happen sooner or later...
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Posco's No-Nickel Steel A Threat To Nickel Demand - JP Morgan
SINGAPORE (Dow Jones)--The development of nickel-free stainless steel by South Korea's Posco (005490.SE) in response to record high nickel prices is a "tangible threat to global nickel demand," JP Morgan said in a report Friday.
Posco, the world's third-largest steelmaker by output, announced Wednesday it had developed an alternative to austenitic stainless steel that could be sold at half the cost. In a statement, the company said it would begin selling 2,000 metric tons per month before increasing sales to 10,000 tons per month in 2008.
"We believe that this is the perfect case of end-user demand pushing through a technological change that presents a genuine threat of substitution," said JP Morgan in the report.
Nickel prices have soared to record high prices on a shortage of supply and rising investor interest in nickel futures contracts. On Friday, the London Metal Exchange nickel price was at $47,100 per metric ton, up 141% from a year ago.
JP Morgan analysts estimate Posco's initial plans to sell 120,000 tons in 2008 will reduce nickel demand by 10,000 tons, or about 0.8% of global consumption of around 1.3 million tons.
The larger threat posed by Posco's new product is that it may lead to similar developments in China, the analysts said.
While Posco has not provided specifications on the steel, JP Morgan believes the new product substitutes manganese and nitrogen for nickel. China is the world's largest producer of manganese ore and ferromanganese, and global manganese prices are "relatively depressed" compared with nickel, JP Morgan said.
"We believe that in demand-centric and price-sensitive commodity markets Chinese stainless steel producers could also switch to nickel-free austenitic stainless production."
This development would significantly change the way the market is run and could cause prices to mean revert before fundamentals would warrant, JP Morgan said.
In the report, it added that prices at current levels are unsustainable, despite apparent supply shortages.
"We believe that irrespective of the reason for the lofty heights in the nickel price - genuine speculation or genuine market imbalance - nickel simply cannot afford to hold on to its perch."
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 - 05/03/2007 : 14:25:09
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Copper Rises in New York on Signs of Strengthing U.S. Demand.
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Copper Rises in New York on Signs of Strengthening U.S. Demand
By Millie Munshi
May 3 (Bloomberg) -- Copper futures rose for a fifth session in New York on signs of strengthening U.S. demand for the metal used in wires and pipes.
Orders placed with U.S. factories rose the most in a year in March and the nation's manufacturing grew in April at the fastest pace in almost a year, reports showed this week. Copper, which usually moves in tandem with economic growth, has gained 3.6 percent this week. The U.S. is the second-biggest user of copper, after China.
``Fundamentals remain pretty strong,'' said Patrick Chidley, an analyst with Barnard Jacobs Mellet LLC in Stamford, Connecticut. ``Demand remains at high levels.''
Copper futures for July delivery gained 1.45 cents, or 0.4 percent, to $3.659 a pound at 8:46 a.m. on the Comex division of the New York Mercantile Exchange. The metal rose to a record $4.04 a pound last May partly on supply disruptions.
Prices were supported by a strike in Peru, the world's third-largest copper producer, traders said. Workers at almost half of Peru's 70 mining unions, including employees of Southern Copper Corp., joined the walkout that began April 30.
``We're in a very volatile market right now, where any hint of supply disruption can affect the prices,'' Chidley said.
The Commerce Department said yesterday U.S. factory orders rose 3.1 percent in March, the most in a year, after increasing 1.4 percent in February. A day earlier, the Institute for Supply Management said its manufacturing index rose to a higher-than- forecast 54.7, the highest since May 2006, from 50.9 in March. Readings greater than 50 signal expansion.
On the London Metal Exchange, copper for delivery in three months gained $40, or 0.5 percent, to $7,995 a metric ton at 1:40 p.m. London time. Prices have climbed 26 percent this year.
A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date. Chile is the world's largest copper-mining nation followed by the U.S.
To contact the reporter on the story: Millie Munshi in New York at mmunshi@bloomberg.net .
Last Updated: May 3, 2007 09:11 EDT
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For good times to come or bad times to come, now is the time to save your copper or nickel coins. |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 05/03/2007 : 15:32:26
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"Copper futures rose for a fifth session in New York on signs of strengthening U.S. demand for the metal used in wires and pipes."
I'm not buying that. US housing is collapsing. Unless our factories are making wire and pipe for export, it makes no sense that US factory demand is up. However the Peru strike is a major factor in the recent price rise. Lets hope that they strike for the next 2 years:) |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 05/03/2007 : 19:36:57
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Gold news:
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Gold Gains for First Day This Week on Supply Drop; Silver Rises
Excerpts
Gold gained for the first time this week after Gold Fields Ltd., the world's fourth-biggest producer of the metal, said output declined at seven of its eight mines. Silver also increased.
The Johannesburg-based company said today that its third- quarter production dropped 3 percent. Gold prices climbed 23 percent last year as global mine supply fell to a 10-year low, according to London-based GFMS Ltd.
``If there is reduced supply, there will be more interest in gold,'' said Anil Sharma, a trader in equity sales in London at Cantor Fitzgerald LP. ``The price would appreciate.''
Gold for immediate delivery rose $2.20, or 0.3 percent, to $675.35 an ounce at noon in London, after declining $8.40 in the first three days of this week. Silver rose 11 cents to $13.325 an ounce, its first gain this week.
Bullion is benefiting from dwindling supply and ``incredibly strong'' demand from China, Gold Fields Chief Executive Officer Ian roostererill told reporters today. Prices should climb above $800 over the next year, he said.
Rising incomes helped China to become the second-biggest manufacturer of gold products including jewelry last year, overtaking Italy, according to a report last month by GFMS. India was the biggest fabricator.
....``There is some speculation on possible gold demand from jewelers,'' Dresdner Kleinwort analyst Peter Fertig said in a report today. ``Some argue that demand might rise after the end of the golden holiday week in Asia as lower prices could trigger buying.''
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Canadian Mint Introduces Wheel-Sized Pure Gold Coin
The Royal Canadian Mint today unveiled a gold coin that's as big as a car wheel and as thick as a hardcover novel, in a bid to help win business lost to global competitors.
The 100-kilogram (220-pound) coin, which is 99.999 percent pure gold, the largest and purest piece ever made, was shown to reporters for the first time today at the mint in Ottawa. While each coin has a face value of C$1 million ($900,000), the purity and quantity of the bullion gold they're made of makes them worth more than twice as much, based on current prices.
``The only word I can come up with is, `Wow!''' Lane Brunner, deputy executive director of the American Numismatic Association's Money Museum in Colorado Springs, Colorado, said of the new Canadian coin. ``Something like this is, I don't want to say beyond comprehension, but it's pretty darn close.''
The 100-kilogram coin and a standard-sized version with a C$200 face value were designed to help regain market share from facilities in Australia, Austria, China and the U.S. that have started producing coins of similar quality. Canada's mint last year sold 296,100 ounces of gold bullion, a 10 percent drop from 2005. Trade in gold coins is estimated to be worth $3 billion worldwide.
``The Royal Canadian Mint faced a growing field of competitors,'' said Ian Bennett, the mint's president and chief executive officer. ``Minting gold bullion coins of 99.999 percent purity is our answer to that challenge.''
...........(One good thing about owning such a coin is the fact no thief would be able to walk off with it. Roll it away, maybe, but not walk off with it. If a thief did walk off with it he or she would have to sell the coin to pay for a hernia operation. )
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Gold gains over $9 on increased fund buying
Gold futures posted strong gains Thursday, recouping their prior-session losses, as investment funds flocked to buy the precious metal, taking advantage of recent price weakness.
Gold for June delivery closed up $9.30 at $684.40 an ounce on the New York Mercantile Exchange. On Wednesday, gold futures closed down $2.20 at $675.10 an ounce.
"The fund activity is what really vaulted the market higher today," said David Meger, senior metals analyst at Alaron Trading. "Once London closed and physical selling abated, the funds were waiting to jump in the market at that point."
Right after the close of the London Metal Exchange, gold prices gained more than $6.
"All of the major physical trading takes place on the London exchange," said Neal Ryan, director of economic research at Blanchard. "When those physical sales stop taking place during the day, you get a pop like [the one we saw today]."
Charles Nedoss, gold analyst at Peak Trading Group in Chicago, said that gold prices rose "more on technical buying than anything else. The 50-day moving average has been a very big directional."
"The metals weren't really trading off of crude oil or the dollar," Nedoss said. "They weren't trading off of the fundamentals."
Looking forward, Nedoss said: "I'd see more buying emerge here if we take out $690. It could be a very quick trip to the highs from there."
Other metals prices also gained. July silver closed up 17.5 cents at $13.51 an ounce, July platinum gained $11.70 at $1,310.80 an ounce and June palladium rose $1.55 at $376.50 an ounce.
July copper gained 8.2 cents at $3.7265 a pound.
On the currency markets, the dollar rose to a two-month peak against the yen and a one-week high versus the euro Thursday. The moves followed a report showing the U.S. economy's non-manufacturing sectors grew at a faster-than-expected pace last month, which eased concerns about the fragile U.S. economic expansion.
......On the supply side, gold warehouse inventories rose by 268,962 troy ounces to stand at 7.9 million troy ounces as of late Wednesday, according to Nymex data. Silver supplies were unchanged at 131.3 million troy ounces, while copper supplies fell by 68 short tons to 33,003 short tons.
Among individual companies, Coeur d'Alene Mines Corp. (CDE) said Thursday it has agreed to merge with Bolnisi Gold NL (CA:CDM) and Palmarejo Silver & Gold Corp. (CA:PJO) in a deal valued at roughly $1.1 billion.
Coeur d'Alene said the merger will create the world's leading primary silver producer with output expected to reach 32 million ounces in 2000. Coeur d'Alene is already a major silver producer and also has a presence in gold.
"As has historically held true with all major mergers in the metals market in the last decade, the end result will be lower production into the market over the long term," said Ryan of Blanchard.
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Current conditions at Peru's most important mines
According to the Peruvian government, less than 5% of some 120,000 miners have joined in the national miners strike, while Peru's mining syndicate affirms 27,000 miners are actively participating with more soon to follow.
On this – the fourth day of the strike, the true impact of the strike on copper, silver, zinc, gold, and tin production remains unclear.
Below is a summary of reported conditions at some of Peru's most important mines:
Southern Peru Copper:
Workers from Southern Peru's Cuajone and Toquepala mines have been on strike since Monday. Workers from its smelter plant in Ilo have been on strike since last Saturday. Despite this, Southern Peru's Executive President Oscar Gonzales says production levels have remained near normal levels.
"I do not have the latest numbers, but on the first two days during the
strike, production was between 90% and 95%. I would have to say that
the strike has had little to no impact on our production output," said Gonzalez.
Volcan:
A union representative informed that as of yesterday, the majority of its workers have joined their fellow miners in the nationwide strike.
"Our operations in Pasco are completely shutdown. Even third party workers have decided to leave their posts. Workers from Junin, San Cristolbal, Carahuacra, and Andaychagua are also on strike," said union representative Fidel Reginado.
Meanwhile, Volcan administrative officials stated they are conducting their efforts 'internally' but could not elaborate on what they intend to do. Volcan is Peru's largest producer of zinc and silver.
Buenaventura:
Workers from Peru's largest producer of precious metals, Buenaventura, worked under relatively normal conditions yesterday, except for workers from Buenaventura's silver mine in Uchucchacua, who are participating in the strike.
"The effects have yet to be seen on Uchucchuacua's production output," said Carlos Galvez, who added that reserve supplies will keep them at normal supply levels through the next couple of days.
Shougang Hierro Peru:
Workers from the Chinese owned iron mine are continuing their jobs with complete normalcy while workers from third party companies who lend services to the mine have joined the nationwide strike.
Doe Run Peru:
According to union representatives, workers from the St. Luis based company's Cobriza mine joined the nationwide strike yesterday. Anibal Carhuapoma, a union representative from Doe Run's smelter plant located in La Oroya, said La Oroya workers are still debating whether or not to join the nationwide protest. It is expected that they will make their decision today.
Minsur:
Workers from the third largest tin producer in the world continued their protest for better conditions yesterday.
"We are supporting the national strike. Operations at our San Rafael mine are completely shutdown," a San Rafael union representative told Reuters via telephone.
Workers from Yanacocha, Barrick Gold, Tintaya, Cerro Verde, and Antamina mines have have not participated in the strike and have continued their normal labor conditions (at the time of this report).
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Copper news (Why not put it here? Copper was one of the earliest forms of bullion and wealth in ancient times.)
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LME copper ends sharply higher; Zinc up
London Metal Exchange zinc and copper led the complex higher Thursday in a late rally, with strength expected to continue in the near term, market participants said.
Fresh fund buying across the complex triggered short-covering in both zinc and copper, helping the two metals jump to fresh 2007 highs.
"Zinc continues to scream higher on the back of both fundamental and technical based buying," said Michael Cuoco of Mitsui Bussan Commodities in New York. "$4,000 zinc has been thrown back into the mix thanks to the McArthur River uncertainty and aggressive short-covering."
According to a member of an Australian environmental group Thursday, Xstrata PLC's expansion of its McArthur River zinc mine could be derailed or delayed for several months if an appeal before Australia's federal court is successful.
Thursday, the mine received legislative go-ahead from Australia's Northern Territory Parliament to allow it to proceed with expansion. However, the Northern Land Council, representing Aboriginal landowners, launched an appeal to begin by the end of this week. "There is no effect on the development of the mine while the hearing continues," a spokeswoman for McArthur River mine told Dow Jones Newswires.
Adding to both zinc and copper price support, Peru's mining federation, which led a national mining sector strike Monday, said Thursday that talks with the government to end the stoppages are going poorly. The government and the mining federation restarted talks Wednesday and said afterward they hoped to reach a solution shortly.
Peru is the world's third-largest producer of copper and zinc, the fifth-largest gold miner and the world's largest producer of silver.
Meanwhile, a drawdown in LME zinc inventories Thursday also provided strong underlying support. LME zinc stocks have fallen some 12% from month-ago levels. LME copper inventories have also fallen sharply providing support for the red metal. LME copper stocks have fallen some 15% from month-ago levels.
Furthermore, "trading conditions in all the metals remain thin, as there are holidays in many Asian markets," said Man Financial's Edward Meir. Prices can move substantially in a short amount of time in illiquid market conditions, according to analysts.
A slew of upbeat economic data has also provided underlying base metals support, said William Adams of BaseMetals.com, including the U.S. over the past few days as well as China.
Early Thursday, the Labor Department said nonfarm business productivity rose at a 1.7% annualized rate between January and March, down slightly from the fourth quarter's 2.1% rise, which was revised up from 1.6%. The first quarter's productivity gain was well above Wall Street expectations for an increase of just 0.8%.
This follows bullish economic data released Wednesday which also gave the base metals a kick higher. U.S. factory orders rose by 3.1% in March after an upwardly revised 1.4% increase in February, the Commerce Department reported.
LME nickel prices were also supported by the general positive sentiment amid tightening supplies. LME inventories have fallen some 7% from month-ago levels.
In news, Russian mining giant OAO Norilsk Nickel triggered a bidding war for nickel miner LionOre Mining International Thursday, launching an all-cash offer valuing the company at C$5.3 billion ($4.77 billion) and topping a rival offer from Xstrata PLC by 16%.
Ahead for Friday, key U.S. economic data includes non-farm payrolls. If the data comes out negative, this could weigh a bit on base metals, said Adams. However, copper looks like it will hold current levels between $8,000/ton and $8,200/ton, although end-of-the-week profit-taking is always a possibility, he added.
Nevertheless, "if we hold at current levels until close of Friday, then Asia comes back next week and they will have a lot of catching up to do," said Adams.
"The short-term direction in metals seems higher," said Man Financial's Meir.
In other news, the European Union expects to adopt as legislation a European Union agreement to halve the import duty on aluminium Monday.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 8180.0-8185.0 Up 225
Lead 2075.0-2080.0 Up 30
Zinc 4029.0-4030.0 Up 169
Aluminium 2845.0-2850.0 Up 18
Nickel 49750.0-49800.0 Up 1000
Tin 14420.0-14450.0 Up 270
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silver junior news
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Eramet's 1Q nickel output drops 14.3% on year
Eramet SA's (13175.FR) nickel production in the first quarter of 2007 fell 14.3% compared with the same period of 2006 to 14,605 metric tons, the company said Thursday.
The strike at the end of 2006 on the French-controlled New Caledonia island in the South Pacific resulted in a reduction in the grade of ore used in nickel production.
Due to the decline in output and need to restock inventories of finished products, nickel deliveries during the first quarter were down 22% at 12,999 tons.
The outlook for the global nickel market remains favorable, Eramet said, and the company's nickel output is due to rise in the second quarter, with 2007 production due to reach between 63,000 to 64,000 tons (vs 62,383 tons in 2006) and deliveries expected at 61,000 to 62,000 tons.
If nickel prices remain at their current levels on the London Metal Exchange at just below $50,000/ton, Eramet's operating income for the first half of the year should be higher than during the second half of last year.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 05/03/2007 19:40:38 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 05/06/2007 : 10:01:09
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UPDATE 2-Peru miners set to end strike after 5 days
Peru's largest miners' federation on Friday said it would soon announce an end to a nationwide strike now in its fifth day.
The National Federation of Metallurgic and Steel Miners did not immediately provide details of a new agreement.
"We are going to suspend the strike starting today," Luis Castillo, leader of the federation, told Reuters Friday, adding that the walkout could be called off by 4 p.m. (2100 GMT).
The Labor Ministry has called a press conference for 3:30 p.m. local time.
The union group called the nationwide walkout on Monday to demand better job benefits and improved conditions for contract workers.
Metals markets were watching the situation because Peru is among the world's top two silver producers and is the No. 3 copper and zinc miner as well as the No. 5 gold producer.
Workers at many of the country's top mines did not join the strike. But some companies have been affected, including Southern Copper Corp.
Stalled negotiations between Southern Copper and striking workers at the Toquepala and Cuajone mines and Ilo smelter remained at issue on Friday afternoon, with Southern Copper and its workers scheduled to enter government-mediated talks.
Union leaders at Ilo and Toquepala have said they could continue their strike even if the federation called off the nationwide walkout, depending on how the company responds to their collective demands.
Workers at Yanacocha, the largest gold mine in Latin America, told Reuters their wage negotiations with the company failed and they would either join the nationwide strike, if it persisted, or stage their own walkout five days later.
At Peru's largest smelter complex, run by U.S. miner Doe Run Co., unionized workers said they joined the nationwide strike on Friday but would return to work if the general walkout ended.
Workers at the main silver mine owned by Buenaventura (BUEv.LM: Quote, Profile , Research) (BVN.N: Quote, Profile , Research), the largest Peruvian precious metals miner, remained on strike on Friday, along with some unionized workers at Volcan (VOL_pa.LM: Quote, Profile , Research), the country's No. 1 zinc and silver producer.
The Labor Ministry has said less than 5 percent of the mining sector's 120,000 workers joined the walkout. The federation of 74 unions representing about 22,000 workers, has estimated the number of workers joining its protest at 27,000.
Mining accounts for more than half of Peru's export earnings. Most of the country's mines are controlled by large multinational companies, whose profits have surged on high metals prices. Workers' demands for a greater share of those profits have intensified.
The last nationwide strike took place three years ago, when miners stopped work for 48 hours to protest the previous government's labor policies. (Additional reporting by Marco Aquino and Hilary Burke)
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Diversification pays off
Johannesburg - Anglogold Ashanti (ANG), the last of South Africa's big gold mines to report on its March quarter, had its usual slow start-up at home, but showed good signs of finally getting to grips with the Ghana and Mali-based assets it acquired through Ashanti and made good headway in Argentina.
Mining gold in no fewer than 10 countries
- South Africa, Argentina, Namibia, Australia, Tanzania, the US, Ghana, Mali, the Republic of Guinea and Brazil -
the group has to deal with a wide range of currencies, cultures and ways of doing business.
In South Africa, which these days accounts for less than 50% of total group production, the first quarter is always impacted by the Christmas-New Year break. It's become a given.
However, it was not only this annual break that led to local production being 12% lower than in the fourth quarter of 2006. Seismicity problems at Tautona and reduced face advancement at Great Noligwa were also to blame.
Good news for the group, which has for several quarters been grappling to bed down the assets it acquired from Ashanti, was improved output performances from Obuasi in Ghana and Yatela in Mali. .......
Output throughout international ops fell
Overall, AngloGold Ashanti's output throughout its international operations fell by 10% to 1.33 million ounces compared to the fourth quarter of 2006, but the group expects output to rise to 1.39 million ounces in the June second quarter.
It also expects cash costs to fall to $325/oz from $332/oz in the March quarter. This drop in costs is dependent on certain exchange rate assumptions across the various currencies in which it operates. It is basing its rand assumption on R7.30 to the dollar.
For the full year to end December, the group is expecting output of 5.7 million ounces at an average cash cost of $320/oz. Again, this depends on certain currency assumptions, with the rand averaging R7.32/$.
.........On the gold price itself, Godsell intimated that consumers appeared to be getting used to gold being at a higher level, a factor that would be important in underpinning a bright outlook for the metal.
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Women rush tiny tubs of rolled-gold cream
DEMAND for luxury skincare is soaring in Australia, as women snap up creams and serums that cost hundreds of dollars for tubs that contain 100 millilitres or less.
A face cream containing 24-carat gold that costs $930 for a 30ml capsule has been the biggest-selling cosmetic at David Jones since its launch last month. La Prairie's Cellular Radiance Concentrate Pure Gold serum costs more than gold itself but women joined waiting lists of up to two months and are buying it unseen and untried over the telephone. "The price isn't the point any more," says La Prairie's Anna Barr. "Women want the latest, the greatest, the product with the best technology."
Frank Cavanagh, Myer's designer-cosmetics buyer, reports that sales of luxury skincare are up by 70 per cent compared with last year and Myer plans to increase its range as soon as it can. "Demand for high-end face creams is insatiable," he says.
Market researchers have identified the emergence of the "uber luxury shopper", for whom price is no object, particularly when it comes to anti-ageing skincare.
"With every purchase, there's a concern there and a desire and willingness to invest in pampering," says Jo-Anne Mason, an independent cosmetic-market analyst. "The taste for luxury has never been so widespread."
Brett Riddington, David Jones' general manager for cosmetics, says women want "even better" than luxury. "How much women pay is extraordinary, really," he says. A La Mer "super serum" designed to be used within 21 days sells for $3500. Its Creme de la Mer moisturiser costs $2500 for 500ml. Both products have inspired "great loyalty and repeat purchases", says La Mer.
Women are happy to spend that sort of money simply because they want to look good, according to Andrea Ferrari, editor of cosmetics trade magazine Esprit. "Baby boomers don't want to look older," she says. "They're devoting cash to their appearance. They spend on the outfit — look at the number of shoes and handbags women have. You wouldn't not spend on your face. If it's working for you, you buy it. And they're finding it does work for them."
South Yarra jazz singer and mother Jane Badler-Hains would agree. She's been using Lauder's Re-Creation Day Creme for the past two years. It costs $690 for 50ml. "I don't know whether there's a psychological aspect to it or not, but a psychological reason is as good as any. These creams make you feel good," says Ms Badler-Hains, who is in her late forties. "It's luxurious — it really does feel amazing and my skin looks fantastic for my age. I buy it because I can afford it and I want to look good and feel good."
Jacqui Niall, 39, loves Eve Lom's cleanser so much she has it sent from London. It costs £75 ($180) for 200ml, plus postage. "I'm addicted," she says.
But skin specialists say nobody should pay astronomical sums for skincare products. Prahran plastic surgeon Peter Dixon says "fundamentally all creams are unproven" except for Retin-A, a prescription-only Vitamin A cream which sells for about $25 and treats both acne and aged skin. "People do want to buy a miracle in a tightly wrapped cellophane box with nice writing on it," he says. "A tube of Retin-A isn't very appealing. But if you're spending $900 on a miracle pot, one has to question what clinical evidence there is to support that product being better than a $60 one."
Toorak dermatologist Dr Greg Goodman says women are paying for "elegance and a name" when they buy expensive serums and creams. "That's a valid thing to pay for, like a Chanel suit," he says. "But they should realise that that's what they're doing."
The gilt trip
#9632; CREME DE LA MER, The Essence, $3500, 3 x 15ml Three 15ml vials in a magnetised box "to align the charges contained within".
Presentation:
What it contains: "A highly potent miracle broth" that includes kelp and calcium, "created through a three-to-four month biofermentation process heightened with light and sound energies and processed in a highly specialised way developed by aerospace physicist Dr Max Huber".
What it claims: "Skin's natural healing energies are unleashed as it journeys through a 21-day cycle of renewal. Skin is visibly reborn."
#9632; LA PRAIRIE PURE GOLD CELLULAR RADIANCE CONCENTRATE, $930, 30mlPresentation: A heavy gold and silver-trimmed vial.
What it contains: Long list of ingredients includes 24-carat colloid gold, hyaluronic acid, neuropeptides, emblica fruit, wild yam root extract, bamboo silica, pea, daisy flower and algae extracts.
What it claims: Among several listed benefits, it "slows down the breakdown of collagen, nourishes and energises the skin, diminishes lines and wrinkles and supports skin during times of hormonal imbalance".
#9632; ESTEE LAUDER RE-NUTRITIV RECREATION DUO, $1320, 100mlPresentation: Two gold-lidded glass jars.
What it contains: The "finest and rarest ocean ingredients" including "a micronised mineral concentrate of 74 trace minerals sourced from the islands of Okinawa" and water taken from "2000 feet below sea level off Hawaii in an area known as the 'zone of regeneration'."
What it claims: "A 24-hour anti-ageing skin care system capable of unleashing your skin's natural power to reveal skin that appears firmer, more luminous and younger thanks to a winning combination of scientific excellence, ancient wisdom and the ocean."
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a use for silver junior that might have been overlooked
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Nickel Puts the "Spark" into Spark Plugs
Fuel-burning engines of all types require a device to ignite the fuel and thus power the engine. The common spark plug has served this purpose since
the gasoline engine was introduced at the beginning of the 20th century.
The spark plug both ignites the fuel/air mixture in the combustion chamber and removes heat from the combustion chamber.
Spark plugs consist of a center electrode, a porcelain insulator, steel shell and a ground electrode. The center electrode is usually copper with a nickel alloy tip. The side, or "ground," electrode is made of the same nickel alloy, usually N06600.
Spark plugs do not create heat. Heat is a byproduct of the ignition of the fuel/air mix, and the spark plug will remove some of the generated heat. Temperatures at the "nose" of the spark plug in the combustion chamber are in the 870-925°C range. Thus what’s needed is an alloy that can withstand these temperatures, as well as corrosion and erosion from the fuel combustion, to act as electrodes between which the spark occurs.
The popular choice for spark plug electrodes is nickel alloy N06600 (containing 72% nickel ). Many spark plug manufacturers prefer to use their own proprietary alloy of about 90-96% nickel plus chromium, manganese, silicon and in some instances, yttrium. This nickel alloy is usually welded to a copper center core; the electricity travels from the ignition wiring to the bottom shell of the spark plug. In some designs, the nickel alloy electrodes are plated with platinum for enhanced spark plug life.
All variations of nickel alloy are readily weldable and ductile, so forming is easily accomplished, as is the subsequent adjustment of the gap when spark plugs are installed in an engine.
Nickel alloys are an ideal choice for electrodes because they resist corrosion and erosion from the combustion products and can endure the high temperatures generated. In addition, the nickel alloy is a good conductor of electricity and heat.
The actual configuration, and thus size, of the electrodes varies from manufacturer to manufacturer. However, the following approximate figures give some idea of the volume and weight in the production of spark plugs worldwide.
The actual nickel electrodes are usually 1.32 millimetres (mm) in diameter for the center wire and 2.38 x 1.59 mm for the side electrode, which is a flattened wire in ribbon shape. The amount of nickel alloy per spark plug is small, about 0.25 gram. However millions of spark plugs are made each day. Bosch (Germany) alone makes over a million each working day, and it is only one of the many large world-wide manufacturers.
Every year, about 56 million automobiles are produced worldwide, according to the Society of Automotive Analysts, and all require spark plugs. At five spark plugs per vehicle (allowing for 4-, 6- and 8- cylinder engines), the annual requirement is 280 million. Thus use of nickel alloy for spark plugs could be in the range of 70 tonnes a year just for new vehicles. Add to this the very large replacement automotive business and other internal-combustion devices, such as generators, lawn mowers, motor boats, piston engine aircraft, etc. and the total number of spark plugs used annually is huge.
...(another use, another reason nickel will go up in price)
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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 - 05/07/2007 : 17:27:40
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June gold up over $15 in three sessions; copper eases after recent gains
Gold futures advanced on Monday to mark a three-session win of more than $15 an ounce as the U.S. dollar fell against other major currencies, underpinning demand for the precious metal.
For this week, "it's all a currency play," said Neal Ryan, director of economic research at Blanchard. "With the Europeans and Asian central banks continuing to raise rates while the Fed is in no position to do the same," gold and, to a smaller extent, silver are "becoming great currency plays."
Gold for June delivery gained 70 cents to close at $690.40 an ounce on the New York Mercantile Exchange. The contract closed below the day's high of $693.20, but it's tallied a $15.30, or 2.3%, gain in three trading sessions.
"With nothing much but the [Federal Open Market Committee] meeting on the week's economic calendar, gold will take cues from the ailing U.S. currency and, evidently, not much else," said Jon Nadler, analyst at Kitco Bullion Dealers, in e-mailed commentary. "A short-term de-coupling appears to be unfolding vis-à-vis the crude-oil price as gold continues to track in the opposite direction."
The dollar fell against other major currencies but stayed in narrow ranges Monday, as investors awaited central-bank meetings on interest rates in the U.S. and Europe later in the week.
The FOMC, the Federal Reserve's policy-setting committee, is widely expected Wednesday to leave interest rates at 5.25%. The European Central Bank and the Bank of England will announce their rate decisions on Thursday.
"Precious metals and the dollar index will be very volatile on interpretation of the language in the Fed statement, but we believe that after the news is digested and the ECB/Bank of England raise rates on Thursday, the dollar should come under renewed pressure to the downside while precious metals enjoy the bounce," said Ryan.
"This week should go a long way toward underscoring the importance of gold and silver trading as currency alternatives," Ryan said.
For now, he said he's "waiting to see if today or tomorrow we challenge the $694-$695 resistance level that a lot of analysts have pegged as the major resistance point right now."
"If we reach and eclipse that level before the Fed meeting and get some dollar-negative news out of the Fed this week, I think we'll finally be up and over the $700 and off to test the $730 high in a flash," Ryan said.
Gold set an intraday peak for a front-month futures contract of $728 on May 12, 2006. That was the highest level since 1980. Gold was quoted in electronic trading that day as high as $732.
Weakness in oil prices failed to phase gold's strength. June crude touched a nearly seven-week low under $61 a barrel as rising crude supplies.
On Friday, gold futures closed near $690 an ounce to mark their strongest finish in nearly two weeks. The move came as the dollar fell against major currencies after a report showed the smallest increase in payroll employment since November 2004.
Also on the Nymex Monday, most other metals prices were higher, though copper eased after last week's gain of more than 6%. July copper gave back 1.1%, or 4.3 cents, to close at $3.7155 a pound.
July silver rose 11 cents to close at $13.64 an ounce, July platinum gained 1.7%, or $22.10, to finish at $1,350.90 an ounce and June palladium rose $2.20 to close at $379.20 an ounce.
On the supply side, gold warehouse inventories fell by 148,175 troy ounces to stand at 7.67 million troy ounces as of late Friday, according to Nymex data. Silver supplies were unchanged at 131.3 million troy ounces, while copper supplies fell by 333 short tons to 32,506 short tons.
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Mongolia to cancel gold profit tax in two months
.........(Who knew Mongolia had gold mines? You learn something new every day...)
Mongolia's parliament will vote during its spring session on making gold exempt from a windfall profits tax imposed last year, but the tax will remain on copper to help develop the country's downstream capacity, Nadmid Bayartsaikhan, Mongolia's finance minister said Monday.
In a law passed May 12 last year, Mongolia imposed a 68% tax on profits from copper concentrate sales when the price of the commodity reaches $2,600 a metric ton, and on gold when the precious metal reaches $500 a troy ounce.
Both metals recently have been trading above that level, with copper above $7,500/ton and gold around $650/oz.
The parliament's spring session will close at the end of July.
Foreign investors have chaffed under the tax since it was introduced in response to popular demands that Mongolia reap a greater return from the global resources boom.
Ivanhoe Mines Ltd. (IVN) and its partner, diversified miner Rio Tinto Ltd. (RIO.AU), said early April that they had reached an in principle investment agreement with the Mongolian government to develop a copper-gold project near Mongolia's border with China, one of the world's largest undeveloped copper-gold mines.
The Oyu Tolgoi project, is set to eventually produce 140,000 tons of copper and have a life of about 40 years.
Bayartsaikhan said that under the agreement the Mongolian government would purchase a 34% stake in the project but that it was still uncertain how it pay for the share.
"There are a lot of ways to purchase this share. Maybe one option is to use a tax exemption, or a tax holiday," he said. "It's unrealistic to buy the stake directly from Ivanhoe because of a shortage of financing."
The deal requires the approval of both companies' boards as well as the Mongolian cabinet and Mongolian parliament.
Bayartsaikan said the parliament would vote on the issue during the spring session.
In July 2006, the government passed sweeping changes to its minerals law, including giving Mongolia the right to bargain for up to a 34% stake in privately discovered "strategic" deposits that contribute more than 5% to the country's GDP.
In deposits discovered with state aid, the government stake can rise to 50%.
"There is a need to update the mining law, but it's not very suitable to change it soon," the finance minister said.
Prior to last year's changes, Mongolia's mining laws were among the most investor friendly in Asia, prompting foreign miners to flock the previously unknown market to tap into its vast mineral reserves.
Bayartsaikan acknowledged the changes had effected investor sentiment but was unfazed about long-term effects.
"Nowadays we feel interest in investing in Mongolia is increasing," he said.
He said foreign direct investment in Mongolia was $317 million in 2006 and expects that amount to increase this year.
"Our transition from a state planning economy to a free market economy is almost over. We have established a very liberal economy and we see a bright future," Bayartsaikan said. "And we very much welcome investors to Mongolia."
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Hedge funds targeting 'hi-tech exotic metals'
Excerpt
Exotic metals such as cobalt, vanadium and molybdenum may be the next targets for investors in the world's overcrowded commodity markets, financiers and traders said last week.
"There are a lot more people in the metals business, and people are looking for unexplored, unsaturated markets," said Daniel McConvey of New York based commodity trading adviser Rossport Investments, which invests in the so-called minor metals.
Most of the multi-billion dollar investment in metals this decade has gone to copper, nickel and other key industrial commodities.
But the amount of money poured into these metals has made it harder for fund managers to make a return, so they are looking at other materials, says Keith Dunleavy, trader at London firm Stratton Metals.....
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Silver junior news
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Jubilee Mines: New discovery at Cosmos
Jubilee Mines NL has announced significant new drilling results from the AM5 deposit, which is located 500m south of the Cosmos Deeps Mine.
The AM5 deposit is located approximately 100m to the east of the high grade AM2 deposit and is hosted both internal to, and at the base, of the host Cosmos ultramafic rock unit.
Significant new drilling results are:
• AMD211 – 30m at 3.0% nickel;
• AMD249 – approximately 50m disseminated nickel sulphides (assays pending); and
• AMD250 – 2.3m at 8.0% nickel (including 0.6m at 25.1% nickel).
Previously reported intersections into the AM5 Deposit include:
• BJD048a – 23.7m 3.6% nickel (including 1.5m at 20% nickel);
• AMD145 – 3.1m at 19.4% nickel, 1.7m at 12.0% nickel, 1.8m at 8.5% nickel;
• BJD078a – 17m at 1.6% nickel, 4.2m at 2.3% nickel; and
• BJD078b – 16m at 1.5% nickel, 6.0m 1.8% nickel.
According to Jubilee, a visual geological assessment of the mineralisation intersected in drill hole AMD249 indicates that a nickel grade similar to AMD211 could be expected. Results will be reported when assays are complete.
The AM5 deposit consists of high grade massive nickel sulphides located on the basal contact, with a large zone of high grade disseminated nickel sulphides immediately above this hosted by the Cosmos ultramafic rock unit. Surrounding this high grade mineralised zone is a large halo of low grade disseminated nickel sulphides grading to approximately 1% nickel.
These new results confirm the presence of a significant body of high grade disseminated nickel sulphides in close association with the high grade basal massive nickel sulphides, and in close proximity to Jubilee's existing mining infrastructure within the Alec Mairs Complex.
To date the mineralisation has only been partially defined on one section, which if continuous, extends vertically over 200m, and the opportunity to substantially expand this new deposit is now indicated.
To accelerate the evaluation of the AM5 Deposit, a second underground drill rig and a second surface diamond drill rig will be mobilised into position within the next three weeks.
These significant new results confirm Jubilee's belief that the wider Alec Mairs Complex is an emerging, large mineralised system with potential for multiple substantial sized nickel sulphide deposits.
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Acquisitive Norilsk forecasts nickel supply deficit
The world's biggest nickel producer, Norilsk, which last week announced a counterbid for Canada's LionOre, forecasts a deficit in global supply for the silvery-white metal, as a number of big industry projects have been delayed.
"We are confident that global demand for nickel will continue to grow strongly," Moscow-based investor relations director Dmitry Usanov told Mining Weekly Online.
"In the circomestances, when a number of sizable projects in the industry are delayed, we do not see enough supply to cover the expected demand," he said in an email.
LionOre bid
On May 3, Norilsk announced a C$5,3-billion, or C$21,50 a share, takeover bid for Canada's LionOre Mining, which comfortably topped a prior bid by diversified mining giant Xstrata, of C$18,40 a share.
Xstrata had the option to match, or better, the bid within five working days of having received formal notification from LionOre.
Analysts expected Xstrata to lodge another bid, which could lead to a bidding war for the nickel producer, which has operations in Botswana, South Africa and Australia.
Asked if Norilsk would consider bidding higher, should Xstrata up the ante, Usanov said that the firm would consider it, but would act in shareholders' best interests.
"We will consider all options available for us at that time and make a decision in the best interests of our shareholders," he said.
Usanov further added that Norilsk could also be interested in other acquisitions.
"We are constantly monitoring opportunities around the world, in case we find something that makes sound strategic and financial sense for us," he said, when asked about the company's plans.
Nickel, used in stainless steel, was currently in tight global supply.
Russia boasted some 40% of the world's known resources at the Norilsk deposit in Siberia.
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India: Global prices may nullify nickel duty cut gains
The FM's announcement of a duty cut on nickel from 5% to 2% is unlikely to benefit domestic stainless steel players. A day after Mr Chidambaram made the announcement, the price of nickel for 3-month delivery at the London Metal Exchange (LME) zoomed by nearly $300 over Thursday's close to breach the psychological $50,000 per tonne mark.
In the last two months alone, prices have jumped by almost 50%. This is likely to induce a lot of stainless steel consumers in automobile, transport and construction sectors, towards other substitutes like aluminium or non-nickel bearing steel.
For stainless steel producers who entirely depend on imported nickel, a steep three-fold rise in prices — from $17,000 to $50,700 per tonne in the last 10 months — has sent alarm bells ringing. The reason is simple. The cost of nickel forms the single largest chunk of expenditure in the manufacture of stainless steel accounting for almost half of the cost.
Stainless steel is being widely used in exhaust systems of cars and in building construction. "When global prices are so strong, import duties tend to erode margins further. There is, after all, a limit to the extent to which consumers will agree to price increases," V S Jain, MD & CEO of Jindal Stainless told ET.
Moreover, the import duty cut will be applicable only on primary metal (pure nickel) which makes up for roughly around half of the total imports. The rest of it comes into the country in the form of stainless steel scrap.
"Beyond a point, high prices tend to wean away consumers towards other substitutes like aluminium. This has started happening globally. Stainless steel demand is strong in our country. But it may happen in our country too," Mr Jain added.
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copper news
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Hind Copper raises prices
May 07, 2007 – Hindustan Copper (HCL), a public sector copper major, raised provisional prices of its products across the board by Rs 1,300.
The current revision, following its previous price revision on April 20, has led to the company's products selling at an average of Rs 45,500 a tonne across all varieties.
The provisional price of 8 mm standard copper rods is now Rs 343,700 a tonne, while the non-standard 11 mm and 16 mm rods will now be quoted at Rs 343,300 and Rs 345,400 a tonne, respectively.
Copper cathode full and cut prices are priced at Rs 340,400 and Rs 341,800 a tonne, respectively.
The company, meanwhile, declared the final price for April, which is 14.60 per cent, or about Rs 46,086 a tonne, higher than the final price for March.
The final prices of copper cathode rods of 8 mm, non-standard rods of 11 mm and 16 mm are Rs 315,666, Rs 315,266 and Rs 317,536 a tonne, respectively. Similarly, the final prices of copper cathode full and cut are Rs 308,990 and Rs 310,490 a tonne, respectively.
The company announces provisional copper prices for the ongoing month based on the price outlook on the London Metal Exchange (LME). On the other hand, the final price is declared by the company considering the average LME prices for the month and other levies, including premiums and duties.
Copper prices on the LME surged by almost $1,080 in the last one month and closed last Friday at $8,060 a tonne. The price rise is largely attributed to declining inventory that fell to 152,025 tonnes last Thursday.
Reacting strongly to the LME price movement, copper wire bar in the Mumbai physical market moved up to Rs 403 a kg on Thursday compared with Rs 369 a kg on April 2.
Copper heavy scrap, sheet cutting and utensil scrap surged to Rs 367, Rs 351 and Rs 340 a kg from Rs 336, Rs 328 and Rs 310 a kg, respectively, in the same period.
Meanwhile, domestic aluminium majors Hindalco Industries and National Aluminium Company cut prices by Rs 4,000 across the board following volatility in the LME prices.
Aluminium prices on the LME moved up to $2,800 on Thursday compared with $2,735.5 on April 2.
Aluminium ingot, too, shot up by Rs 4 to Rs 144 a kg in the domestic market in the last one month.
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Copper Price warning-Fact or opinion? Time will tell....
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CBA sees copper prices down 30% in Q4 07
Copper prices may drop about 30 % to $5,500 a ton by December '07 and average $6,220 a ton this year as demand lags behind supply following a slowdown in the U.S. housing sector, according to the Commonwealth Bank of Australia.
Copper for delivery in three months on the London Metal Exchange climbed 6.7% over the last week to close at $8,320 a ton Friday, the highest in more than seven months.
Copper prices climbed to a record $8,800 a ton a year ago on supply disruptions and demand from China, the world's largest consumer of the metal.
"The copper price is already at high levels and, in our assessment, current pricing already embodies favorable assumptions on the demand side," David Moore, commodity strategist at the bank, said. "Just as the copper price moved quickly higher, the risk of a sharp adjustment lower should not be ignored."
Credit Suisse cut its 2007 copper price forecast by 13 percent to $2.84 a pound, or $6,261 a ton, in February and said supply would exceed demand this year, reversing a prediction for a deficit. The bank previously forecast that copper would average $3.25 a pound this year.
Commonwealth Bank, which is based in Sydney, expects copper consumption to rise more than 4 percent this year because global economic growth was "very supportive" for metal demand. Demand for copper in China, where economic growth accelerated to 11.1 percent in the first quarter, will remain strong, it said.
Still, it may weaken in the United States, the world's second-largest user, because of a slowdown in the housing sector, the bank said.
"We have long held the view that the supply-demand balance for copper is unlikely to be sufficiently tight over the course of 2007 and into 2008 to sustain copper prices at around $8,000 a ton," Moore added.
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Peru miners reach accord with government, end strike
Peruvian miners ended the strike that began last Monday and was set to last indefinitely after reaching an agreement with the Labor Ministry to attend to their demands.
Friday's decision was communicated by the secretary general of the National Federation of Metallurgic and Steel Miners, Luis Castillo, who said that the ministry "responded" to their demands.
Labor Minister Susana Pinilla said, for her part, that one point of agreement is that mining companies not punish the strikers, and called on them to comply with that measure.
She added that the ministry is committed to working out a proposal that would include union participation in determining shift lengths. Additionally, other agreements will be drawn up regarding profit-sharing and miners' pensions.
Pinilla also said that still pending is a solution to demands being made independently by miners at the Southern Copper Corporation – one of the world's biggest copper producers – and at Shougang, although she added that both conflicts are currently being negotiated.
The minister had said Monday that just 5 percent of the mining sector's 120,000 workers had participated in the strike, while the federation estimated the total number of protesters at 35,000.
Peru, one of the world's leading silver, gold and copper producers, has been the scene of several conflicts involving mining companies and Peruvian grassroots protesters, who demand more jobs, regional development and improvements in environmental standards.
The miners' strike heightened the air of social unrest in a week that also saw protests by coca-leaf growers in the country's central region, and by rice and sugar producers in northern Peru.
The Peruvian government, which had already resolved the demands of the rice and sugar sectors, also offered to set aside funds to allow the hiring of teachers in the southern Andean region of Cuzco, where authorities had threatened their own strike to enforce their demand.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 05/07/2007 17:32:04 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 05/09/2007 : 15:21:58
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Peru's zinc production gains 36% in March; Gold output down 14%
Peru's output of copper and zinc rose in March, while gold and some other metals declined, the Energy and Mines Ministry said late Monday.
The ministry said gold output totaled 15,169 kilograms in March, down 14% compared with the same month a year before.
The ministry didn't give greater details for March's production numbers.
Zinc production was 126,123 tons in March, up 36% from the same month a year earlier, it said.
Copper production rose 5% to 100,609 metric tons in March, it added.
Among some of the other minerals, the government said that molybdenum output fell 27% to 1,215 tons in March.
Lead production was 27,479 tons in March, an increase of 7.5% from the same month in the previous year.
Tin output was 3,169 tons in March, down 6% from the same month in the previous year.
Iron output totaled 448,237 tons in March, a 4% increase from the same month in the previous year, the government said.
Mineral production has become a motor of the Andean nation's economic growth, with a number of new mines opening in recent years. Peru is the world's largest producer of silver, and depending on annual production, is among the top five for zinc, copper and gold.
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Copper price decline continues on LME
Profit-taking along with softer oil prices set off short selling in London Metal Exchange copper and nickel Wednesday ahead of comments by the U.S. interest rate-setting body that analysts said should clarify near term price direction.
LME copper fell more than 3% intraday, bouncing back to close above a key psychological level at $8,000 a metric ton, and buy stops were triggered in LME nickel when it dropped through $50,000/ton.
The rest of the metals also felt the heat, with zinc down 1.3% on the day at $4,065/ton and lead down 1% at $2,065/ton as of 1722 GMT.
The U.S. Federal Open Markets Committee is expected to keep rates at 5.25% when it releases its decision and statement at 1815 GMT, but comments will be analyzed for signs of the country's economic health.
Earlier in the session, the U.S. energy department reported the biggest jump in crude inventories since January, with a 5.6 million barrel rise for the week ended May 4 triggering Nymex crude to fall 57 cents to $61.69 a barrel.
This also pressured spot gold, noted Triland metals analyst John Kemp, which fell over 1% intraday and piled pressure onto the base metals complex.
Both LME nickel and lead suffered speculative "acute reversals," Kemp said, and "the nickel high was made on very low volume," he added. Three-month nickel pushed to a fresh record high of $51,800 a metric ton earlier driven by speculative buying on supply concerns, brokers said.
Australian nickel miner Jubille Mines NL is closed while a fatality is investigated and nickel exports from West Australia's Port Esperance are suspended pending facility upgrades, expected to be completed before the next shipment is scheduled for June.
The two main companies that ship nickel concentrate via Esperance are LionOre Mining International Ltd. (LIM.AU) and Jubilee Mines NL Esperance shipped 194,136 tons of nickel concentrate in 2006.
LME aluminium is slowly breaking to the upside of the tight $2,600-$2,900/ton price range seen since October 2006, noted Deutsche Bank.
"Persistent backwardation is continuing to provide investors with a positive roll return," it added, while one broker said he expects aluminium prices to break $3,000/ton by the end of May.
In other metals, LME zinc remains well supported by system-based trade buying and further stock drawdowns, but failed to break upside resistance around $4,170/ton, while tin traded largely in range.
In news, Corporacion Nacional del Cobre de Chile, the world's largest copper miner, on Wednesday temporarily shut down its Andina mine until it has investigated the cause of a fatal accident.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Tuesday PM kerb
Copper 8050.0-8060.0 Dn 114
Lead 2060.0-2065.0 Dn 25
Zinc 4085.0-4090.0 Dn 30
Aluminium 2886.0-2887.0 Dn 7
Nickel 49295.0-49300.0 Dn 1605
Tin 14200.0-14300.0 Dn 50
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 - 05/09/2007 : 18:31:21
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some more news on silver junior
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PHILIPPINES
TheStar.com - Business - Nickel exports to China triple on steel demand
Nickel exports to China triple on steel demand
Shipments of nickel laterite ore from the southern Philippines to China more than tripled in April from a year earlier as Chinese companies sought alternative supplies.
Exports rose to 492,002 tons from 144,547 tons, according to Bureau of Customs data obtained yesterday. The southern Philippines mines most of the nation's low-grade ore, which competes with easier-to-process nickel sulphides.
China's steel makers have boosted purchases of the harder to process laterite to create nickel for stainless steel for appliances and cutlery. The shift may help reduce nickel prices.
From the Star's wire services
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Expert Article
Is there any way out for stainless steel on nickel price soaring?
The price of nickel has increased rapidly over past few months. Doest it affect the users to stop using stainless steel products? The question is in what way the nickel trend is going in 2007.
As nickel price staying at high levels, some of service centers even mentioned that the customers have reduced on purchasing orders quantity because of the high nickel prices. Currently the most customers are more conservative not to order more quantity and just order what they need to order in first quarter, 2007.
It seems most of users will continue to purchase stainless steel in spite of the increasing nickel price. However, in past few months, most buyers are seeking stainless steel with less nickel contents in order to balance the production cost, such as grade 201, 301 and 430. Meanwhile, it is widely considered to use carbon and coated steels instead of stainless steel.
The low nickel-contained stainless steel is becoming more popular. Recently, grade 201 has been accepted largely in the market. Stainless steel 201 grade no doubt has a price advantages over 304. It also contains more chemical composition such as manganese than nickel. It is becoming great demand by replacing 201 grade for money saving. On the other hand, the 201 grade doesn’t fabricate as easily as 304 and it will have a surface problem such tiny seams forming according to one of service center reported.
China’s Baosteel Group Corp. is testing the application of nickel pig iron alternatively to replace the expensive nickel and stainless scrap for producing stainless steel. Nickel pig iron is a ferronickel pig iron containing 3–5 per cent nickel. Chinese has found their way to develop new nickel source for production.
However, the substitutions of low nickel stainless steel are still restricted for certain application, for example in cold-storage, because high nickel contained steel can last much longer than other material. Also, in architecture industry, it required large consumption of high-nickel grade steel. It is much better with appearance with less maintenance than pre-painted or coated steel materials.
Nevertheless, as long as the nickel price stays at high levels, the stainless steel price will remain soaring.
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$20/lb nickel prices unsustainable, sharp price correction coming – S&P
Although nickel prices will remain very strong throughout this year, Standard & Poor's suggests that current "astronomical prices of more than US$20 per pound are likely unsustainable and negative economic news could lead to a sharp correction in prices."
In a report published Monday, S&P Primary Credit Analyst Donald Marleau noted, however, that "based on current demand projects and proposed development timelines, the nickel market will not face the risk of significant oversupply until 2010,
and Standard & Poor's Ratings Services has extended this expectation several times in recent years
because of recurring project delays and we could again as the supply picture evolves."
....(Much like the real estate & stock market boosters, they don't know what the future holds, price wise, but they will NOT change their predictions or expectations just because of a few pesky details, like facts, change in demand, etc.)
Marleau forecast that a modest 5% average annual growth rate in nickel consumption will necessitate an additional 60,000 tonnes of nickel production annually. However, he noted that the mining industry has historically added a 60,000-tonne annual producer nickel mine only once every five to 10 years.
"To compound this scarcity, the output from mature operations has been declining for years, and the capital and operating costs for new developments have increased sharply as producers exploit increasingly challenging ore bodies."
For the past three years, nickel supplies haven't always met demand, resulting in accelerated mine development internationally, according to S&P. "Nevertheless, many new mine projects have endured serious delays and cost overruns, leaving customers seeking substitutions."
‘To date, substitution and demand destruction have been fleeting because of the technical constraints of stainless steel mills and because of end-users limited tolerance for lower grade stainless steels (about two-thirds of nickel is consumed in the production of stainless steel), Marleau suggested. "Nevertheless, current nickel prices are proving a strong incentive for customers to explore alternatives."
Offsetting the excellent demand outlook for nickel "is the potential for demand destruction and excessively high prices and nickel surcharges on stainless steel," Marleau wrote.
"Consumers of nickel foresee continued supply constraints and a less transparent, more concentrated market with the acquisition in recent years of three of the world's largest nickel miners-WMC Resources Ltd., Falconbridge Ltd., and Inco Ltd.-by large diversified mining companies," he wrote. "As a consequence, stainless steel producers have sought to lower their exposure to nickel by shifting to lower nickel-containing grades-and even ‘no -nickel' grades-but with only limited success to date."
Marleau's research determined that nickel supplies will continue to be limited. For instance, new nickel supply from Canada's Voisey's Bay has had little or no impact on nickel inventories and prices. "Furthermore, the market remains extremely sensitive to labor strikes and any other disruptions that commonly affect mining operations."
Although leading nickel producers "have a series of new mines at various stages of development," S&P found that deposits are becoming increasingly difficult and expensive to develop.
Meanwhile, "as nickel producers seek to increase production, companies are increasing their exposure to more technologically risky deposits," according to Marleau. While mining of laterite ores is economically attractive despite lower nickel grades, extracting nickel from these ores requires more energy and a costlier method of processing than that for traditional nickel sulfide deposits.
"And because of the nascent technologies employed, the economic production of nickel from new laterite ore bodies has been erratic over the past decade," he explained. "Equipment failures have resulted in significantly higher than estimated capital expenditures and disappointing output."
"Miners are racing to accelerate nickel production to take advantage of exceptional pricing and to prevent permanent destruction of demand. Numerous Greenfield or brownfield projects are on the drawing board around the world, but a project that isn't underway today is probably five years from any significant output, and the capital and operating cost estimates could face upward revision as the project proceeds," Marleau asserted.
"So although the nickel industry is benefiting from extremely high prices, keeping up with demand is proving difficult, and added production could come too late," Marleau concluded.
.......(Experts 'expect' demand for nickel to decline because prices are going up and nickel substitutes will increase. While this is possible, what happens if, say, China or India buy up some nickel mines for the metal for their own consumption, not worldwide sales? Demand would go up from a decreased supply, and nickel needed in high content alloys (superalloys) for weaponry or tool manufacturing cannot be so easily substituted. Of course, this is pure speculation on my part, though buying the mines, gaining a gauranteed supply and cutting out the middle man is the type of smart thing that China or India would do)
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 05/09/2007 18:34:31 |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 05/09/2007 : 19:56:50
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1982-2007 Cent (97.5% zinc) * $0.01 $0.0101035 101.03%
Zinc cent's melt value is over a penny again.
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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 - 05/10/2007 : 17:49:23
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A little good news for the dollar and all of the traders on Wall Street are ready to dump the precious metals.
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DJ PRECIOUS METALS: NY Gold Falls As Dollar Firms, Stops Hit
By Allen Sykora
Of DOW JONES NEWSWIRES
A recent correction lower in gold and silver accelerated Thursday when the dollar firmed and sell stops were tripped in the metals, analysts said.
Speculators liquidated positions.
Meanwhile, some analysts continue to offer differing views on thesignificance of gold sales by European central banks lately.
June gold fell $15.50 to $667 an ounce on the Comex division of the New York Mercantile Exchange. Shortly after pit trade closed, the June contract at the Chicago Board of Trade was down $15.50 to $667.30.
Comex July silver fell 33 cents to $13.14. As it was closing, CBOT July silver was down 35.2 cents to $13.121.
The metals have been correcting in recent days, and that pace picked up when the dollar regained some of its recent weakness, traders said.
"The dollar has been the fundamental push," said Patrick Lafferty, Commodity Trading Adviser with Fox Investments, a division of Man Financial. "But the technicals were lined up for this. It made it a real easy sell. The market's
path of least resistance as already set up to be down. The dollar just accentuated today's move."
The euro fell to a low of $1.3466 from $1.3528 late Wednesday.
As gold fell, sell stops were hit around the $675 area, said Lafferty. "There were a lot of stops and we blew right through those."
Then more stops were hit in the area near $670, the low from May 2 and also roughly the 50% retracement point of the March-April rally, he said. June gold bottomed at $665.90, its softest level since April 2.
In July silver, stops were triggered around the $13.30 area, said Lafferty.
"The market toyed with them yesterday a little bit when we hit $13.285, but it bounced pretty quick. But today when we went back down, they couldn't hold it," he said. "It went through that support and accelerated and is targeting that $13 level right now."
Ahead of this, he put some support around $13.10, the "right shoulder" in a "head-and-shoulders" chart formation.
Several traders and analysts during the course of the day linked much of the selling to liquidation.
"A lot of speculators have been long," said Lafferty. "They bought into the fact the market was trying to bottom last week in silver and gold. Now, a lot of speculators are exiting and liquidating."
George Gero, vice president with RBC Capital Markets Global Futures, said a large possible rollover out of Comex June gold is weakening the technical picture.
"Over 220,000 June contracts have to be rolled in the next few weeks," he says. "Banks started selling yesterday and funds followed today. Part of it was the Fed's resolve on inflation, part of it the dollar."
Analysts and traders continued to debate the impact of some of the recent gold sales by European central banks.
Neal Ryan, director of economic research with Blanchard and Company, maintains this is a key factor that has been holding gold back lately.
"It's our belief that the market supply gap is being bridged at present by an increase in central-bank sales and possibly increased loans and swaps," he said in a daily research note.
Others acknowledge the sales but downplay the significance, however.
"Central banks are simply exercising a keener sense of market timing," said a research note from Jon Nadler, analyst with Kitco Bullion Dealers. "Aggregate official sales fell way behind the allowable quota last year. Near-record gold
prices - such as those we have had since February - will simply and logically elicit a sale that was previously unfilled."
Meanwhile, July platinum fell $15.30 to $1,324.20 an ounce, while June palladium declined $6.65 to $363.75 an ounce.
"A lot of it is simply spillover from the gold- and silver-market weakness and the strength in the dollar," said Dan Vaught, futures analyst with A.G. Edwards.
However, he added, there could be some thoughts that the platinum group metals may have posted a seasonal peak during their recent run-up, which carried platinum to a record Nymex high. Automakers tend to be most aggressive producing vehicles during the second calendar quarter of the year, Vaught said.
If so, there is a lead time in which parts makers are buying platinum group metals ahead of this.
"They have probably completed a great deal of that buying at this point, traditionally around the first of May or late April," Vaught said.
He also pointed out that some of the recent jewelry demand from Asia may be abating now that some of the continent's major holidays are over, such as Golden Week in Japan.
"That's somewhat of a gift-giving season for them similar to Christmas for us in the West," Vaught explained. "If that's the case, given their affinity for platinum jewelry, we may see a bit of a (buying) letdown in the wake of the holiday."
Little technical damage has been done to July platinum, even though July has pulled back from Monday's $1,353.80 peak, Vaught said. Support lies around the 20-day moving average, he said. Shortly after the close, this stood at $1,313.30.
June palladium may suffered more technical damage, Vaught said. The market had closed above the 40-day moving average for weeks, but was below this in early pit trading this morning. Shortly after the close, this average stood at $367.70.
Trendline support for June palladium may lie around the $360 area, whichroughly coincides with the upper end of a range the market was in for several weeks prior to an April breakout.
The markets get a couple of major U.S. economic reports early Friday, which have the potential to influence the dollar and thus metals. The reports include the Producer Price Index and retail sales at 8:30 a.m. EDT (1230 GMT). PPI is forecast to be up 0.6% in April, or up 0.2% excluding food and energy. Retail
sales are forecast to be up 0.4% for both the overall number and the category excluding autos......
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Future gold production to watch
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SA gold output fell 10,8% y-on-y in March
South Africa’s gold production fell 9,5% in March 2007, compared with the previous month, and 10,8% compared with March last year, Statistics South Africa said in its mining production and sales report on Thursday.
Total mining production during the month was 12,2% lower than March 2006.
However, total mining production for the first quarter of 2007 increased by 1,7%, compared with the first quarter of 2006, although it was 4,3% lower than in the three months ended December 31.
The decrease was due to a decrease of 5,2% in the production of nongold minerals, noticeably platinum, StatsSA said.
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The new gold
May 10th 2007 | JOHANNESBURG
From The Economist print edition
A pot of platinum for the rainbow nation
IT WAS gold that laid the foundation of South Africa's economy over a century ago. Could platinum be a brighter force in its future? That is the hope in exuberant mining towns such as the oddly named Rustenberg as platinum prices near record highs. Dwindling reserves and ever-deeper mines are making gold harder to extract. Meanwhile, sales of the platinum metals group—which also includes palladium and rhodium—were twice those of gold last year. Almost all production is refined and smelted at home, and contributes 15% of South Africa's merchandise exports. Platinum now has roughly as many miners as gold.
Luckily for producers, demand for platinum remains solid, even with rising prices. Lovers may turn to other metals for their engagement or wedding rings, but jewellery accounts for only 22% of platinum demand today, down from 45% in 1999. The car industry requires far more. Now the world of finance is joining in, with the launch of bullion exchange-traded funds (ETFs) in London and Frankfurt by ETF Securities. Switzerland's Zurich Cantonal Bank was expected this week to launch an ETF based on platinum, palladium and silver. Speculation ahead of the launches has helped push prices above $1,300 an ounce. For most of the 1980s and 1990s, they rarely topped $600.
Autocatalysts, which reduce exhaust emissions, now provide the biggest need for platinum. Stringent environmental standards have increased demand and made it less sensitive to price, at least for diesel cars. Although cheaper palladium is increasingly used in new petrol vehicles, platinum is still the only practical option for diesel. With about half of its new cars running on diesel, Europe is the largest platinum consumer.
Speculative demand linked to the ETFs has raised concerns about supply pressures in an already tight market, just as it did for gold. Since the launch of the first gold-traded fund in 2003, financial buyers' share of demand has doubled, from 10% to 19%. There is not enough platinum around for the metal to become as much of a financial refuge as gold has, but ETFs have introduced a new source of demand, which is likely to keep prices high.
Platinum stocks are small compared with gold stocks—there is not much platinum on people's fingers or sitting in central banks' vaults. Autocatalysts have now been around long enough for platinum to be extracted from scrapped cars. But recycling old catalysts still contributes a modest 11% of total supply. So mining companies have been ramping up production, expanding their mines or chasing new deposits. Exploration has picked up.
With South Africa sitting on 80% of the world's platinum resources, places like Rustenberg are where the excitement is. GFMS, a consultancy, reports that global platinum output increased by 6% last year, but overall production outside South Africa was more or less flat. A strengthening rand, red tape over new mining permits, and infrastructure problems and other bottlenecks have been dogging mining investment in the country. But Roger Baxter, of the South African Chamber of Mines, says these are now easing. The people in Rustenberg have good reason to be cheerful; so should anyone wearing a platinum ring on their finger.
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LME nickel rises on supply concerns; Other metals down
London Metal Exchange copper, tin and zinc succomebed to further profit taking Thursday as U.S.-based funds liquidated positions, although analysts said trade buying should support prices close to current levels.
At 1653 GMT, LME copper was down 2.5% from Wednesday at $7,840/ton, while tin was down roughly 3% at $13,800/ton and zinc and aluminium were around 2% lower, at $4,020/ton and $2,825/ton, respectively.
A lack of follow-through buying added to the downward price pressure across the complex, said UBS analyst Robin Bhar.
"Specs don't want to buy at these kind of levels, they'd rather wait and see, and consumers won't take the market higher," he said, referring to historical strength across the complex.
"Consumer and investor buying should come in around these levels, so downside is limited," he added.
In the afternoon session, U.S.-based funds accelerated selling pressure on LME copper and zinc, a broker said.
Selling in copper was primarily chart-based, analysts said, citing solid fundamentals with declining inventories amid the peak demand season, fueled by China.
Traders will watch carefully whether copper holds near the 20-day moving average of $7,916.20 a metric ton, the broker added.
Meanwhile, tin scored the largest percentage fall of the day as long liquidation compounded a technically driven slide, triggered by a break below the 20-day moving average of $13,967.30/ton, another broker said.
However, speculators don't want to go too short, UBS's Bhar noted, because even through 12 or so Indonesian smelters now have export licenses, stocks are close to the lowest levels of the year, at 8,045 tons according to Thursday's LME data.
In October, Indonesia closed dozens of small smelters on environmental and taxation concerns, but has since reissued export licenses, somewhat easing price pressure.
In other metals, LME nickel bucked the trend, boosted by supply-side concerns in Turkey and Australia.
On Wednesday, European Nickel PLC said it continued to encounter delays in obtaining the necessary forestry permit at its Caldag nickel project in Turkey.
Meanwhile, Australian nickel miner Jubilee Mines NL temporarily suspended development work at its Cosmos nickel mine following the death of a worker, apparently of natural causes, the company said in a statement Wednesday. Mining operations have been suspended temporarily in a small part of the development area, said a company spokesman.
"One event is bad, but two is even worse," said Calyon analyst Michael Widmer.
In addition, the Western Australia Port of Esperance said Tuesday it would complete required upgrading work at its nickel-loading facilities before the next shipment is due in June.
In looking into Friday and next week, "There's scope for a bit of a push higher but the window is rapidly closing," said UBS's Bhar, noting the impending "summer slowdown" season.
Prices in dollars a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 7880.0-7890.0 Dn 170
Lead 2040.0-2045.0 Dn 20
Zinc 4000.0-4010. Dn 85
Aluminium 2837.5-2838.0 Dn 49
Nickel 49900.0-50000.0 Up 605
Tin 13795.0-13800.0 Dn 405
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China refined copper imports jump 148% in March 2007 in response to strong market demand
Wed, 9 May 07 – China's General Administrator of Customs reported imports of refined copper totaling 202,995 Metric Tons (MT) for March 2007.
This represented a year on year increase of 148% compared to the same period last year, and illustrates the strong demand for copper in China.
Refined copper exports totaled 3,094 MT in March 2007, for a year on year decline of 92.60%.
Demand for copper in China remains very strong amidst government efforts to curtail exports of this important non ferrous metal. China's industrial requirement for copper has prompted more importation and greater controls on exports, as this strategic commodity is a crucial component of one of the world's most dynamic economies.
Terra Nostra Resources Corporation's CEO, Mr. Sun Liu James Po states, "The demand for copper in China is continuing to grow in tandem with its strong economic development. Local manufacturers and importers have a large gap to fill in order to feed China's appetite for copper as a part of its ongoing industrialization, particularly for the next few years."
Terra Nostra, through its subsidiary Shandong Terra Nostra Jinpeng Metallurgical Co. Ltd, a producer of electrolytic copper, is well positioned to benefit from these trends by being able to respond to this demand as a well established supplier situated in a key industrial region of China.
About Terra Nostra Resources Corporation
Terra Nostra is one of the leading copper producers in China through its 51 percent interest in Shandong Terra Nostra Jinpeng Metallurgical Co., Ltd., which has an existing and under construction production capacity of 170,000 MT (metric tons) of electrolytic copper, 20,000 MT of low-oxygen copper, and value-added copper rod and wire facilities.
Terra Nostra is also emerging as a leading stainless steel producer in China through its 51 percent interest in Shandong Quanxin Stainless Steel Co., Ltd., a modern stainless steel production facility that commenced operations in early 2006 with a now expanded 230,000 MT casting mill, and a recently commissioned 150,000 MT rolling mill. The two joint venture companies, which Terra Nostra recently entered into an agreement to increase its ownership up to 90%, with total assets exceeding US$200 million and over 1000 employees, are located in the highly industrialized coastal province of Shandong, midway between Beijing and Shanghai.
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Copper falls as Chinese demand set to ease, Peru supply returns
Thu, 10 May 07 – Copper fell as demand from China looked set to ease, and after supply from Peru returned to normal levels
Chinese imports are expected to fall after the world's biggest consumer shipped in record amounts earlier this year.
....(key word here is expected, not gauranteed.)
Earlier today reports said China's imports of refined copper in March rose 148 pct year-on-year to 202,995 tonnes, according to Customs data. ABN Amro analyst, Nick Moore said the market was "expecting (Chinese) imports to be sharply lower," on account of high imports earlier this year
Meanwhile, prices were pressured as output from Peru came back after a strike last week
At 11.26 am, LME copper for three-month delivery eased to 7,980 usd per tonne against 8,050 usd at the close yesterday
Further, production from Peru returned to the market, after a recent miners strike ended late last week
"The end of the strike action in Peru over the weekend has seen mines in this part of the world move back to normal operating levels," said JP Morgan analyst, Michael Jansen
Copper prices have gained 36 pct since the start of the year, however, and are relatively close to year highs hit last week of 8,335 usd. Demand in the second quarter is traditionally stronger as Western European countries tend to process higher volumes of metal before they embark on long summer vacations
Most other metals also came off strong gains made last week. Losses were limited, however, as the LME reported stocks of the major metals, except tin, fell
Nickel inventories fell 12 tonnes. While the fall was modest, stocks of the metal, used mostly for stainless steel production, are so low they would not satisfy one day's worth of global consumption
Nickel was up at 49,850 usd against 49,295 usd yesterday
In other metals, aluminium was down at 2,873 usd from 2,886 usd yesterday, zinc was lower at 4,075 usd against 4,090 usd while lead was down at 2,060 usd compared with 2,065 usd at the close. Tin fell to 14,000 usd against 14,250 usd
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Chile Codelco contract workers threaten new strike
Some 28,000 contract employees of Chilean state copper company Codelco on Wednesday announced a nationwide strike after accusing the firm of not delivering to them benefits it agreed to after a strike held last year.
Union spokesman Cristian Cuevas told reporters that the workers are also demanding compliance with a law for the sector that has been in place since last year and the payment of a cash bonus by Codelco.
Cuevas declined "for security reasons" to reveal the date on which the strike will begin, but reports are that it will be next week.
After the call to stage the strike, Codelco announced Wednesday that an accident took the life of one worker at the Andina division and management had decided to halt operations for an undetermined period.
The call for the strike is the culmination of a series of mobilizations that the contract workers' unions in various Codelco divisions began this week after their three-way negotiations broke down with representatives of the firm and the Chilean government.
Cuevas said that the unions will return to the negotiation table when Codelco Human Resources vice president Francisco Tomic and representatives of the Mining and Labor Ministries join the talks.
Tomic played an important role in resolving the strike last year and changes in the makeup of the negotiating teams were asked for in a letter that the unionists sent on Tuesday to Chilean President Michelle Bachelet and Codelco CEO Jose Pablo Arellano.
In recent days, the workers have held assemblies and protests at various Codelco facilities.
The firm announced that a rockfall inside the mine killed the worker, and it said it would halt operations for "the time that may be necessary" to ensure that there is no further risk. It also said it would begin "a full investigation to determine the causes of the accident."
Codelco is the world's main producer of copper, with annual output of some 1.8 million tons, and in the first quarter of the year it made a profit of $1.79 billion.
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From stainless steel site
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Requests since 4/26 from a Chinese global trade site -
(China) We are now purchasing large quantity Nickel ore, need 1.5% above content and phosphorus content -
(China) We want to buy nickel laterite ore every month with big quantity, requesting Ni: 1. 5-1. 8% , Fe (
China) We are Chinese importer that mainly import nickel ore and chromite ore, if you can supply, please
(Thailand) Hello every supplier of nickel! We have a very large demand on nickel mineral with about 100, 000
(China) We desire to import a large quantity of copper / zinc / nickel ore / skimming / dross / ashes / mud
(Nigeria) We need nickel ore of Ni 1% above we need 100, 000 tons per month or any quantity
(China) Now we are interested in the Nickel ore, the HIcontent above 1.6 percent.
(China) We want to import nickel ore in the year 2007. We prefer to trade with the owner of the nickel ore.
(China) We are going to buy 30000-50000 MT each month Nickel Ore (all grades)
(China) We are seeking suppliers of lateritic nickel ore for long term cooperation. Content of Ni 0. 9% -1.
(China) Our company wanna import chromium ore with 52%-54% chromium contained(from India is better).
(China) We are Chinese importer that mainly import chromite ore, please contact us
(Germany) We have orders for lateritic nickel ore the qty is required is as much as available.
(comment - interesting to note how many are looking for nickel ore now , not processed nickel)
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Opinion, but worth considering
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Metals enter strange new world
With this upturn longer than any other, massive mining mergers make little sense on the surface.
Carl Mortishead, The Times, London
Published: Thursday, May 10, 2007
Wait for it. Soon there will be talk of new commodity paradigms. How else can you explain a share market that wants to believe in hundred-billion-dollar bids for mining companies when metal prices are at record levels after a six-year run?
Yesterday's hysteria focused on a rumoured bid by BHP Billiton for Rio Tinto, a transaction that would have combined the first and second-largest diversified miners, a juggernaut worth a quarter of a trillion dollars and an enterprise on a scale with Royal Dutch Shell and General Electric.
Rio quickly denied that there had been any talks. It emerged later that a sighting of Leigh Clifford, BHP's chief executive, dining with Tom Albanese, Rio's new chief, at a mining conference in Dublin may have sparked the rumour. Remarking on the sudden leap in Rio stock, a waggish analyst suggested that Mr. Albanese should dine out more often.
But it makes little sense.
A bidder for Rio is, above all, interested in its core assets, notably Hammersley, the iron ore business.
Between them, BHP, Rio and CVRD control 80 per cent of the seaborne iron ore trade and there can be no question that the world's steelmakers would scream if a producer were to be seen flirting with another.
The wider question is whether this is a good time for mining companies to link up.
We are more or less in the sixth year of a metals upturn, the longest cycle ever seen. In the world previously regarded as normal, base metals enjoyed brief, two-year summers during which miners raised cash and launched projects, followed by long winters in which copper or zinc price was weighed down by excess capacity.
Most metals analysts are predicting a downturn, with new mine capacity hitting the market between 2008 and 2010.
Why, then, are miners believed to be in acquisitive mode? Nick Moore, of ABN Amro, reckons that they are under pressure because of their cash flow:
"The industry is over-capitalized. The fund managers are saying: 'If these mines are so profitable, why don't they give us a better yield?'"
Single-product metal makers, such as Alcan and Alcoa, are seen as more vulnerable, sensitive to the value of one commodity. It is easy to see why Alcoa would find it convenient to use an expensive purchase of a neighbouring rival to fend off the attentions of a bigger diversified mining giant.
Meanwhile, the diversified miners have been wrong-footed by the cycle. Typically, Rio's strategy was to amass its cash during the upswing and spend it on the most attractive prospect in a downturn. However, this time the waiting has not been rewarding because of China's demand and the intervention of financial investors.
The new thinking is that metals will fall, but not so far. The nadir of tomorrow's metals crash could still be very profitable. There are fewer prospects, and aggressive newcomers, such as Xstrata, are bidding up prices. When the music stops, no one wants to be left without a chair.
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A bit more information on gold, more views than news, maybe more opinion than facts, but worth reading and considering.
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China Buying Gold!
I have absolutely no doubt that someday, and soon, you're going to hear that China has been actively buying gold as part of its strategy to diversify its $1.2 trillion in cash reserves.
When you hear that news, every broker and analyst under the sun is going to tell you to buy gold and gold mining shares like crazy.
But don't listen to them because it will be too late.
By the time the Chinese admit they have been buying gold, I can assure you, we will be much closer to the top of the gold market than the bottom.
See, the Chinese are never going to publicly acknowledge they've been buying gold until they are done buying. That's just how it is. That's how any central bank would do it.
This is why I have been telling you to buy gold all along. And I think it's also one reason why gold is now making a beeline for new highs....
China Needs a Lot of Gold
To Catch Up to Other Countries
An estimated 70% of China's $1.2 trillion in reserves, or $940 billion, is invested in dollar-denominated assets, mostly U.S. Treasury bonds.
Bond prices themselves are vulnerable to falling. And with the dollar hitting new lows against most major currencies, why the heck would China wait any more to diversify its reserves? Why would it wait any longer to buy gold?
According to official records, which mean nothing when it comes to China, Beijing has only about 1.3% of its total reserves in gold. That's only 19.29 million ounces of gold, worth a minor $12 billion at today's gold prices.
Meanwhile, the U.S. has 75.9% of its reserves in gold … the Euro region has 24.4% … heck, even tiny Cameroon has more gold in its reserves than China!
There is no way that China is going to sit still with so little gold on hand. In fact, barely two weeks ago, People's Bank of China Vice Governor Xiang Junbo publicly admitted that China should "appropriately increase its gold reserves."
Another economist, He Fan, at the Chinese Academy of Social Sciences, a top government think tank, said the following about gold,
"I think the authorities must have realized the need to raise gold reserves … I think it's appropriate to increase the proportion to 10-15% to match that of some European countries."
.....
Gold Supplies Are Dwindling
For Many, Many Reasons
There are a lot of reasons for this:
First, many smaller mines have been acquired by major corporations with strong balance sheets. These larger companies have massive cash reserves and have no need to overproduce.
Compare that to the 1980s and 1990s, when many of the world's smaller mines were running full-tilt. They produced every ounce of gold they could, and sold 100% of it. More importantly, they sold 100% of their future production as well.
Second, scores of marginal mining operations have been closed. Literally hundreds of gold mines were boarded up and shut down during gold's 20-year bear market. Now, most of those mines are completely out of commission. Closed mines typically fill up with water and it takes years to re-open them. Sometimes it's not even possible to reopen them!
Third, gold exploration is drying up. Despite the recent bull market in gold, exploration budgets worldwide are no higher than they were in the late 1990s.
That's important because it means far fewer new gold fields are being discovered. And even if exploration spending rises again, it takes most new gold finds five to 10 years to go into production.
Fourth, gold producers have delayed or canceled much-needed mine upgrades. Between 1994 and 1996, gold mines spent more than $140 per ounce of annual production on expansion and productivity enhancements.
But recently, they cut back to just $80 per ounce. Old equipment is not being replaced and new production capacity is not being created. And again — even when capital spending resumes, it will be years before any new productivity improvements will be seen in increased production.
Fifth, major producers are maintaining — or even cutting — production. The majors are focused on enhancing returns and increasing margins rather than expanding production. Put simply, they get a better return on investment by making their new acquisitions efficient than they do by increasing sales of mined gold.
Sixth, mining firms are less interested in selling future production. To protect themselves from price decreases in the 1990s, many mining companies entered into contracts to sell future production (gold that was still in the ground).
Back then, this strategy was a bonanza for gold mines because it allowed them to sell gold they wouldn't even be mining for two, three, even five years into the future.
Now, the reverse is true. Gold prices are rising, making forward selling unprofitable. So over the last two years, mining firms have been buying back their forward sales, effectively reducing future supplies.
Plus, gold that the mines would be selling today was already sold years ago, and few if any significant new supplies can come to market.
Seventh, central bank sales of gold are now frozen. Throughout most of the 1980s and 1990s, huge central banks the world over dumped an estimated 2,341 tonnes of gold onto the market. Every time demand began pushing gold prices a bit higher, the banks would sell like crazy, squashing prices flat.
But all that changed on September 26, 1999. On that day, 15 European central banks, the central banks of the U.S., Japan, and Australia, as well as the International Monetary Fund and the Bank for International Settlements, agreed to strict limits on gold sales dictated by the Central Bank Gold Agreement (CBGA).
............(Gold hype? Gold has that effect on some, though many of the facts presented seem logical. We will see what the future holds for gold.)
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 05/10/2007 18:13:36 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 05/11/2007 : 16:53:03
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Gold gains, but posts a weekly loss of over $17
Gold futures closed higher Friday, staging a partial recovery from a more than $15-an-ounce drop in the previous session as strength in oil prices and some weakness in the U.S. dollar lent support to the precious metal.
But Thursday's drop in the benchmark June gold contract to its lowest closing level since late March was the biggest contributor to the $17.40, or 2.5%, loss in prices for the week.
"A marginal decline in the U.S. dollar gave gold prices the smelling salts they so badly needed after yesterday's swoon," said Jon Nadler, an analyst at Kitco Bullion Dealers.
But "only about a third of yesterday's damage was offset by today's bounce – and the mood remains cautious, at best," he said in afternoon commentary.
Gold for June delivery rose $5.30 to close at $672.30 on the New York Mercantile Exchange Friday.
"Gold is recovering after this morning's clearly disappointing retail-sales number and PPI lift," said Kevin Kerr, editor of Global Resources Trader, a newsletter of MarketWatch, the publisher of this report.
"Bond bulls are back and the dollar bears seem to have all the ammunition they need to take the greenback down a few pegs at this point, and they likely will," he said in e-mailed comments.
But the contract closed down $15.50, or 2.3%, at $667 an ounce Thursday to mark a seven-week low after the dollar rose to a one-month high against the euro.
Peter Grandich, editor of the Grandich Letter, said traders were disappointed that gold could not breach the $700 level. That "led to some chart selling, a short-covering rally in the U.S. dollar and an unusually high number of outstanding contracts that need to be rolled over on the Comex," he said. "So, gold is back at the key support level around $665."
"I expect some sloppiness for the near term, but I see the $700 level being taken out before the end of June," he said in e-mailed comments.
Still, sentiment has been "damaged" as gold lost around 3% in the latest slide since April 23, said Nadler.
"Traders are suddenly much more aware of minute details such as the cessation of the May Indian wedding season tomorrow," he said. "The astounding drop in retail sales that hit the markets ... yesterday still should be fully factored in before making any rash trading decisions."
In the backdrop, the dollar dipped against other major currencies after government reports showed weaker-than-expected U.S. retail sales and benign core wholesale inflation for April.
Higher energy prices pushed up wholesale prices by 0.7% in April, but core inflation was tame again, the Labor Department reported Friday.
And U.S. retail sales fell a weaker-than-expected 0.2% in April, the Commerce Department estimated Friday.
For now, strength in oil prices appeared to provide some support, with higher energy prices raising gold's appeal as an investment hedge. Crude-oil and gasoline futures extended their gains Friday as traders continued to show concern over U.S. gasoline supply levels ahead of the summer-driving season.
Other metals prices followed gold higher, with July silver up 16.5 cents to close at $13.305 an ounce, though it was 1.7% below last week's close.
July platinum rose $17.50 to finish at $1,341.70 an ounce, up almost $13 from a week ago. June palladium added $4.90 to close at $368.65 an ounce, finishing below last week's close of $377.
And July copper rose 3.75 cents to close at $3.604 a pound. It's down 4.1% from last Friday.
On the supply side, gold warehouse inventories were unchanged at 7.62 million troy ounces as of late Thursday, while copper supplies fell by 464 short tons to stand at 31,529 short tons, according to Nymex data. Silver supplies fell by 388,487 troy ounces to stand at 131.5 million troy ounces.
.........Traders were 'disappointed' when gold dropped a little (buying opportunity for smart investors) would traders be disappointed about the weekend if it rained on saturday?
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SA platinum and gold mine strikes may spread
Strike action in the South African mining sector could spread to other mines operating on the Bushveld and elsewhere as the country's major mining workers union, the National Union of Mineworkers (NUM), is demanding "double digit" percentage increases in salaries.
Lesiba Seshoka, NUM spokesperson, said although further strikes depended on the approaches of the various negotiating teams involved in wage negotiations, the NUM has found that companies have hardened their attitudes towards union demands.
The NUM is currently engaged in wage negotiations with local platinum companies and some gold companies. It is due to start annual wage negotiations with the SA Chamber of Mines members and the rest of the mining sector in June.
Seshoka said the union's wage demands did come against the background of booming commodity prices, but NUM also took recognisance of inflation and the individual performance of commodities.
"Our demands are not unreasonable, we are only trying to negotiate living wages and to address the gap between the rich and the poor."
Strikes are currently ongoing at Simmer and Jack's Buffelsfontein gold mine near Stilfontein in the North West province and at Aquarius' Kroondal and Marikana platinum operations - both located on the western limb of the Bushveld complex.
Buffelsfontein has stopped underground mining and is losing more than R1.8 million every day the strike is prolonged. The strike went into its second day today.
Aquarius has not quantified the revenue or ounces it is losing in the unprotected strike that kicked off on Wednesday night, but said Kroondal is currently sustaining 15% of production and Marikana 60%.
Kroondal delivered 102,079 PGM ounces last quarter (April 2007) and Marikana 30,148 PGM ounces.
Striking workers here are employed by Murray and Roberts Cementation (MRC) and are taking action over the dismissal of 130 underground drivers, said NUM.
The NUM requested a minimum salary of R2,700 (US$385) a month for Buffelsfontein underground workers currently earning R2,010 per month, while Simmers is offering an increase to R2,450 over two years.
The company maintains that the net effect on workers gross remuneration will be an increase from R3,710 to R4,520, representing a 22% increase over two years. (The mines usually supply accommodation and food to their workforces as part of the employment package.)
Northam Platinum resumed operations at its Northam platinum mine on Tuesday night after a seven workday strike that severely hampered production.
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LME base metals edge up on short-covering
London Metal Exchange base metals closed Friday higher on technical buys, led by copper, as equities recovered and participants squared positions in positive sentiment seen extending into next week.
The market largely brushed aside modestly weaker-than-expected U.S. retail and producer price index data, with price support coming from a rebound in the FTSE 100, triggered by Wall Street's initial push higher, a broker said.
As of 1644 GMT, LME copper was trading up 0.5% at $7934 a metric ton, up 2.5% from the intrasession low.
Technical buying triggered a rebound in LME copper prices, sparked when a push through the 20-day moving average of $7,929 a metric ton attracted further buying, a broker said.
Ongoing LME stock withdrawals amid peak demand season in China has the metal on track for new highs within the month, said BaseMetals.com analyst Will Adams.
LME lead however, logged the largest percentage increase of the day, jumping over 3% intraday after a push through $2050 a ton triggered buy-stops said another broker.
China, which is significantly short of concentrate to supply refinery production, holds the key to further lead upside, said Barclays Capital in a daily note
The Chinese market is susceptible to external market forces, such as the closure of Ivernia's Magellan mine in Western Australia, which could amount to around a 40,000 reduction in lead concentrate, almost large enough to wipe out the expected 2007 surplus, the bank said.
Shipments from the mine have been suspended since mid-March, pending environmental investigation after 4,000 birds died from lead poisoning and lead levels in the blood of a number of local residents where found to be elevated.
Likewise, LME tin also finished strongly, due to short covering and pent up demand, BaseMetals.com's Adams said.
The metal rose roughly 2% on the day to $14,050 as of 1717 GMT.
Tin prices remain supported by supply-side damage, with Indonesia's output seen falling 30,000 tons this year, Adams said.
Although the government has been handing out export licenses to smelters, after closing many last October for tax and environmental reasons, LME stocks are below 80,000 tons approximately one-and-a-half week's supply.
Short-covering ahead of the weekend buoyed the rest of the metals, with aluminium up 1.3% from Thursday at $2875/ton, and zinc closing above $4,000/ton.
In news, Russia's largest metals producer, Norilsk Nickel (NILSY) said it has hiked investment by $1.32 billion for 2007, not including expenditures for acquisitions.
Norilsk intends to increase ore output to 26 million tons by 2015 from 21 million tons.
Norilsk Nickel is one of the largest metals producers in the world, accounting for 20% of all nickel produced. It also produces 40% of the world's palladium, 10% of its cobalt and 3% of its copper.
In other nickel news, global primary demand for the metal is expected to rise by 20,000 metric tons during 2007 to 1.41 million tons, from 1.39 million tons in 2006, due primarily to strong demand from China, the International Nickel Study Group said Friday.
And Russian export data released Friday showed that the country exported 900,400 tons of aluminium in the January-March period, 23.3% less than the same period last year. Nickel exports fell 7.4% to 57,600 tons in the same period, while copper exports rose by 1.7% to 78,800 tons the Federal Customs Service reported Friday.
Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Thursday PM kerb
Copper 7890.0-7895.0 Up 10
Lead 2085.0-2090.0 Up 45
Zinc 4045.0-4050.0 Up 45
Aluminium 2875.0-2877.0 Up 38
Nickel 50400.0-50500.0 Up 500
Tin 14000.0-14050.0 Up 205
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Supply concerns push LME nickel higher
London Metal Exchange nickel jumped roughly 2% Thursday due to ongoing supply concerns amid declining inventories, with further price strength expected over the near-term, said market participants.
Three-month nickel traded to a session high of $50,250 a metric ton around 1400 GMT Thursday driven by speculative interest, up roughly 2% from Wednesday's close. Nickel prices eased late Wednesday after touching a record high of $51,800/ton hit earlier in the day.
The uncertain situation surrounding nickel projects in Turkey and Australia has helped to send nickel prices higher, said Michael Widmer of Calyon in London. "One event is bad, but two is even worse," said Widmer.
On Wednesday, European Nickel PLC (ENK.LN) said it continued to encounter delays in obtaining the necessary forestry permit at its Caldag nickel project in Turkey.
"The (nickel) infrastructure projects are almost complete but we don't envisage the approval being granted before the formation of the new government following the rescheduled general election," said managing director Simon Purkiss. "In the meantime, we are working with our engineers to reduce the impact of the delay," Purkiss said.
The European Nickel aims to produce 50,000 metric tons of nickel a year by the end of 2011, the company said.
Last week, Turkey's parliament approved July 22, 2007 as the date for early general elections, which were called to resolve a government crisis over sharply rising tensions between the pro-secular military and the Islamic-rooted government.
Meanwhile, Australian nickel miner Jubilee Mines NL (JBM.AU) temporarily suspended development work at its Cosmos nickel mine following the death of a worker, apparently of natural causes, the company said in a statement Wednesday. Mining operations have been suspended temporarily in a small part of the development area, said a company spokesman.
In addition, the Western Australia Port of Esperance said Tuesday it would complete required upgrading work at its nickel-loading facilities before the next shipment is due in June.
The port's mineral export license is currently under review following lead poisoning in birds in the area and elevated lead levels in the blood of local residents, thought to be the result of dust escaping during shipments of lead from the port.
The two main companies that ship nickel concentrate via Esperance are LionOre Mining International Ltd. (LIM.T) and Jubilee Mines N.L. (JBM.AU)
In 2006, 194,136 tons of nickel concentrate were shipped through Esperance.
Adding to price support, LME nickel inventories have fallen some 10% since the start of May and roughly 30% from the start of 2007. This, in turn, has helped LME prices climb over 50% since the start of 2007.
Nickel's strength contrasts sharply with the weakness spread across the base and precious metals markets.
One trader in London said another push towards $52,000/ton is likely in the near-term, especially if the supply situation deteriorates further.
However, analysts warn of the threat of substitution as prices continue to push and hold at such record highs.
In the stainless steel industry there is mounting evidence of increased nickel demand destruction and widespread substitution of higher-grade austenitic steel by low grade and to a lesser extent by ferritic grades, said UBS analyst Robin Bhar.
Furthermore, higher stainless steel scrap availability and nickel pig iron are displacing primary nickel units in consumption, he added.
............(While substitutes for nickel in stainless steel may come into play, it must be remembered that it isn't simply a matter for steel makers switching over from making stainless with nickel to stainless without. Steel manufacturing, unlike making bread or soft drinks, isn't simply a case of changing the ingredients and sell the modified product quickly. Making steel, especially stainless steel, requires adding the materials at just the right time and just the right amount at just the right temperature, or else the product will lack strength, durability, or be free from structural flaws. While nickel substitutes may be available, the equipment for steel making must be modified to work with the changeover. This all takes time, and time lost means products not available to customers which in turn means lost sales, and in this globalized world, lost sales means someone else who can provide the product makes the sales, and gets future sales from the customer.
Also, some buyers will want stainless with nickel in the finished product, high prices or not. The nickel free steel might not be what the customer wants (or trusts) and will insist on stainless with nickel in it.
Steel makers for the present will have to keep selling stainless with nickel to keep making the sales. Just my thoughts and opinion on the subject, nothing else.)
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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 05/11/2007 17:14:53 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 05/14/2007 : 20:08:50
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Cheese & crackers, do the Chinese have to be the biggest in everything?
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China will be world's top gold miner in next decade
With continuing expansion of its gold industry and declining production elsewhere, China is poised to become the world's largest gold producer in the next decade and western mining companies are taking advantage of the opportunities opening up in this sector.
Excerpts
On Chinese gold production - at the current rate of growth - boosted by external involvement in the sector by companies like Sino Gold, Jinshan and Leyshon - and with output declining at all the major producing countries, China is on track to become the world's largest gold producer during the next decade. It is already in third place after South Africa and the USA.
It could also become the world's largest consumer. Like many eastern countries gold is recognised for its wealth store benefits and with the huge advances in standards of living for the average Chinese citizen demand by individuals is bound to grow dramatically over the next few years. Also, as Atherley points out, China has one of the lowest proportion of its huge currency reserves in gold among the world's major nations at 1.3 percent and although GFMS analyst Bruce Alway tended to discount any change in this situation, Atherley pointed out that Chinese academics and economists are vociferous in their advice to the government that it should diversify if foreign currency holdings.
.........As pointed out by Atherley, the cost of developing a new mine in China is perhaps a fraction of that elsewhere in the world - and here even the exploration has been very low cost given the near surface nature of the material found so far. This is put at only US$5 per ounce. With an operator paid only $4,000 a year, chief geologist $6,000 a year, electricity at US5 cents/kwh at the mine gate, diesel US80 cents/litre, loading hauling and blasting at $2.5 per cubic metre and the cost of the gold plant $30 million and local equipment capital costs extremely low compared with elsewhere, return on capital can be extremely rapid.
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Copper drifts on concerns Chinese demand might fall, gain in stocks
Copper drifted lower as large stock levels in China, the world's top consumer, stoked concerns demand might tail off.
Further, prices were pressured after the LME reported inventories of the red metal rose 200 tonnes at 142,475 tonnes on the day.
At 10.31 am, LME copper for three-month delivery fell to 7,790 usd per tonne against 7,895 usd at the close yesterday.
'(While) potential for further Chinese tightening pose downside risks to metals demand, we see increasing potential for re-surging economic activity to further tighten the fundamental balance in these markets,' said analysts at Goldman Sachs in a report.
China reported record copper imports in the first quarter, raising fears the Asian nation face a surplus in the later months of this year.
Losses were limited in the longer term across all of the complex, however as 'base metals inventories remain extremely low, further tightening would likely generate substantial upward price volatility, presenting upside risk to returns', Goldman Sachs analysts said.
Elsewhere, nickel prices eased as the LME reported stocks of the metal, used mostly for stainless steel production, rose. However, falls were limited as global stocks are so low they would not satisfy one day's worth of consumption.
Nickel was down at 49,800 usd against 50,500 usd at Friday's close.
In other metals, aluminium was lower at 2,846 usd from 2,877 usd, zinc dropped to 3,991 usd against 4,050 usd, lead tumbled to 2,070 usd against 2,090 usd, while tin slumped to 13,900 usd against 14,050 usd at Friday's close.
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Gold slips under $670; palladium falls on report of 2006 supply surplus
Copper futures fell 3% Monday to mark their lowest closing level in more than five weeks in what analysts dubbed as continued consolidation on the heels of the nearly one-year high prices saw earlier this month.
Gold futures closed lower as well, but mixed sentiment in the dollar and anticipation of fresh U.S. economic data due later this week underpinned demand for the precious metal.
Copper for July delivery closed down 10.7 cents at $3.497 a pound on the New York Mercantile Exchange after tapping a low of $3.48. The contract touched an intraday low of $3.47 on April 27, but it hasn't closed at a level this low on the exchange since April 5.
The contract climbed to $3.80 on May 4, its strongest level since late May of last year.
"Overall, the market is slipping again," said William Adams, an analyst at BaseMetals.com, in a note to clients. "For the moment, this seems to all be part of the bout of consolidation that all the metals are going through and which stands out quite clearly on the charts with technical indicators under pressure."
The London Metal Exchange reported Monday that warehouse copper stocks climbed 200 metric tons to 142,475 metric tons, marking the first daily rise since April 16, according to BaseMetals.com. They've dropped 32,325 metric tons, or 18.5%, since that date to their lowest level since early Nov. 2006, it said.
Meanwhile, June gold declined $2.20 to close at $670.10 an ounce, giving back part of Friday's gain of more than $5.
July silver fell 7 cents to finish at $13.235 an ounce, extending last week's loss of 1.7%.
The gold market has "growing anxieties about where the top end of the current range lies and what selling the attainment thereof might precipitate," said Jon Nadler, metals analyst at Kitco Bullion Dealers, in e-mailed commentary.
In the backdrop, the dollar fell slightly against the euro Monday, carrying over from recent losses as investors awaited this week's key inflation and international capital-flows reports. But the greenback gained modest ground against the yen.
"This week's economic statistics will offer plenty of data worth pondering (CPI, housing starts, capacity utilization, jobless claims and consumer sentiment), and might bring gold's short-term price prospects into sharper focus," said Nadler. "Although, much still depends on what level the U.S. dollar will find a comfortable level to trade at."
When asked what would take gold prices to the $700 level, Nadler, in a video interview with MarketWatch Monday, said "it would take a set of geopolitical conditions and economic factors out there, which are currently not in the equation, to convince investors to start loading up on this hedge asset a little bit more than they have been."
For now, "the theme of dip buying looks set to continue in the coming sessions," said James Moore, metals analyst at TheBullionDesk.com.
"The short-term outlook for gold is still mixed though, with the market potentially facing some further pressure should the dollar recover," he said in a research note. "However, the long-term bull trend remains firmly intact with gold still on course to challenge $700 once $694 chart resistance is conquered."
Report weighs on platinum, palladium
Also on Nymex, palladium suffered a sizable loss in the wake of a report from metals refiner Johnson Matthey which showed that palladium demand fell in 2006 and the market ended the year with a surplus of supplies.
June palladium dropped $7.95 to close at $360.70 an ounce in New York.
Meanwhile, global platinum supplies outpaced consumption in 2006 for the first time in eight years, as world jewelry demand dropped more than 18%, Johnson Matthey's "Platinum 2007 Review" report said.
The high price of platinum and an increase in recycled jewelry cut overall world jewelry demand for the metal by 18.3%, or 360,000 ounces, last year, to 1.61 million ounces, it said.
Platinum for July delivery fell $12.40 to close at $1,329.30 an ounce Monday.
The platinum group metals market is "certainly looking heavy following the JM report," said TheBullionDesk.com's Moore, in e-mailed comments.
Moore said he believes palladium is "at risk of some sizeable long selling following the recent build in fund longs [and] technical support at $354 needs to hold to avoid a correction back to $330."
In other commodities trading, crude-oil futures rose Monday, extending their prior-session gains on concerns over supply disruptions in Nigeria, as tight U.S. gasoline inventories helped lift retail gasoline prices to a record level.
On the supply side, gold warehouse inventories were unchanged at 7.72 million troy ounces as of late Friday, according to Nymex data. Silver supplies fell by 58,088 troy ounces to stand at 131.46 million troy ounces, while copper supplies fell by 464 short tons to stand at 31,529 short tons.
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 - 05/15/2007 : 18:22:06
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Norilsk halts Dudinka shipments on seasonal floods - "Norilsk Nickel , the world's largest nickel miner, has suspended shipments from its Arctic port of Dudinka due to seasonal flooding and plans to resume loading in mid-June, the company said on Tuesday."
Bill Cara in his 'Cara's Daily' today - (excerpt)
"Apparently, the fear of a slowdown in China's metal imports triggered profit-taking in copper futures and shares of miners BHP, FCX, RTP and TCK (downgrade).
Goldman Sachs, which is probably behind that story as they downgraded China a week ago, yesterday downgraded the aerospace and defense industry from Attractive to Neutral, also because of valuation.....We now have to watch the China story evolving here.
This China slowdown story is clearly being fabricated by Goldman Sachs, who must be over the moon with their trading profits from shorts and put options.
If it can be shown that such tactics preceded their research call, and they are taking their clients and the rest of us to the cleaners in order to dress up their quarter, then it’s only a matter of time before the market responds.
Putting their people into the key positions as Treasury Secretary and as head of the FOMC trading desk is just too close for comfort." -
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Has changed their news policy. They will only allow news 24 hours old or older to be viewed by the general public.
News from metalsplace will still be relayed on this forum once it is one day old. I am unwilling to sign up to Metals place since I am not a trader or speculator in metals.
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Treating Nickel Like Gold
Excerpts
Two trends in the flurry of recent merger and acquisition activity have been metal miners eager to consolidate and international companies eyeing takeovers of North American companies to benefit from favorable currency rates. The duo emerged =Tuesday in the bidding war between Swiss-based Xstrata and the Russian Norilsk Nickel for Candian nickel miner LionOre Mining.
..........Like other metal miners, Norilsk and Xstrata are eager to consolidate to find economies of scale. They also want to grow as prices boom. Nickel is mostly used to make steel, and China's construction has helped drive up demand. At the same time, production increases have been stifled because remaining ore deposits require costly projects to tap them.
The conditions have already encouraged acquisitions of other nickel producers . Last year, Xstrata bought Canadian nickel miner Falconbridge for about $18 billion... Also last year, Brazilian iron miner Companhia Vale do Rio Doce.. bought the Candian nickel giant Inco for $17.4 billion.
LionOre reported annual nickel production of 34,094 metric tons last year. Xstrata has an annual nickel production of 110,000 metric tons. Norilsk Nickel said it expects to produce 270,000 to 275,000 metric tons of nickel in 2007.
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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 - 05/16/2007 : 18:00:55
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Good news for the dollar, bad news for gold and silver.
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Gold, Silver Futures Fall as Dollar Strengthens Against Euro
By Pham-Duy Nguyen
May 16 (Bloomberg) -- Gold and silver fell in New York as a gain in the value of the dollar against the euro reduced the appeal of the precious metals as alternative investments.
Gold has moved in tandem with the euro 74 percent of the time in the past year, Bloomberg data show. Gold reached an 11-month high on April 20 as the euro was headed toward an April 27 record against the dollar. Before today, the metal has climbed 5.7 percent this year while the euro has gained 3 percent against the dollar.
``Gold is watching the dollar right now,'' said Greg Milkovich, senior market strategist at Lind-Waldock & Co. in Chicago. ``We really need to see the dollar break to get above the $675 level.''
Gold futures for June delivery fell $4.30, or 0.6 percent, to $670.20 an ounce at 9:05 a.m. on the Comex division of the New York Mercantile Exchange.
Silver for July delivery fell 11.5 cents, or 0.9 percent, to $13.20 an ounce. Before today, the metal had gained 2.9 percent this year.
The euro has fallen about 0.8 percent against the dollar since reaching a record $1.3681 on April 27.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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n/a
deleted
26 Posts |
Posted - 05/17/2007 : 11:05:37
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China worries drag down base metals
Thu 17 May 2007, 11:53 GMT
[-] Text [+] By Humeyra Pamuk
LONDON (Reuters) - Industrial metals prices fell on Thursday, with copper dropping to a six-week low and dragging down the whole market on signs of oversupply in China, the world's top consumer of metals.
Copper for three months delivery on the London Metal Exchange touched $7,260 a tonne, its lowest since April 4, before bouncing back to $7,380 in the official session, still down by 3 percent or $230 from Wednesday.
Chinese imports would slow, metals analyst Michael Widmer said, adding: "They are going to remain as net importers but I would find it hard to believe that they will continue to import at the same pace."
China's imports of refined copper, anode and copper alloy in April stood at 205,053 tonnes.
That was down by 6.5 percent from March's record of 219,359 tonnes but exceeded expectations.
"Tomorrow, the Shanghai exchanges will release stock figures, and there is some apprehension that copper inventories, in particular, will be quite high," LME ring dealer MAN Financial said in a note.
Last week's data showed copper stocks in Shanghai Futures Exchange warehouses rose almost 20,000 tonnes between April 26 and May 10.
Widmer said a rise in LME inventories had added to selling pressure.
Copper stocks in London Metal Exchange warehouses jumped 1,600 tonnes on Thursday, taking the total to 142,700 -- still less than four days of global consumption.
"Copper is very, very expensive, especuially when there is not a shortage," an LME trader said.
World copper supply is likely to exceed demand by 270,000 tonnes in 2007, the International Copper Study Group said in a release.
NICKEL TIGHTNESS
Supply tightness in nickel weighed on spreads. The backwardation, the premium for cash material over three months, has almost doubled to $3,450 since late-April, its highest in almost three months.
Nickel for three-months delivery on Wednesday shed $1,250 to $49,200. The metal hit an all-time high of $51,800 earlier this month.
Stocks of nickel in LME warehouses edged down by 6 tonnes to 4,866, with available or on warrant stocks rising 24 tonnes to 3,954 -- around one day's global consumption.
Lead tumbled by 5.5 percent and touched $1,980 a tonne, before bouncing back to $2,010, still down 4 percent or $85 from Wednesday's close.
"A lot of the upwards pressure in the past few weeks was caused by short covering. Once those shorts are covered we see the prices easing," Widmer at Calyon said.
Zinc fell 5 percent to $3,650 and was at $3,675 in the official session while aluminium shed $53 to $2,795.
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 05/17/2007 : 17:28:09
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Welcome to the forum NickelHead and thank you for the information.
All forum members are alwyas welcome to post anything important they see concerning bullion (and the new bullion, sulver junior (nickel) and copper (copper being possibly the first money metal.)
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Gold futures end lower; copper falls for a fourth day
Gold futures closed lower Thursday to tally a two-day drop of nearly $16 an ounce and copper futures tumbled more than 3% to mark their fourth losing session in a row as traders eyed economic data in the U.S. and moves in the dollar for hints on demand for the metals.
Gold for June delivery fell $4.30 to close at $657.20 an ounce on the New York Mercantile Exchange, following a low of $654.30 -- levels not seen since March 15. The contract lost 1.9%, or $13, on Wednesday.
"The economic data flows are indeed only adding to short-term indecision, but perhaps also to the downside bias in gold," said Jon Nadler, metals analyst at Kitco Bullion Dealers. "And the odds ... are apparently still on the side of the shorts."
The dollar rallied to a three-month high against the yen and one-week high versus the euro Thursday, extending some of its gains.
A Labor Department report showed first-time claims for state unemployment benefits fell 5,000 to 293,000 in the latest week.
Overall, the gold market appears to be "trading on technicals rather than any fundamental news, with the sell-side pressure and shorts currently in control of the market," said Neal Ryan, director of economic research at Blanchard.
Ryan admits that Blanchard's prediction for $700 gold in a matter of weeks was wrong. Even so, "the fundamental picture for the market is more bullish today for increasing prices than it was just two years ago at $400 per ounce," he told clients.
Copper sinks
Meanwhile, copper futures fell to their lowest level since early April, with the June contract tumbling 11.6 cents, or 3.4%, to close at $3.3065 a pound. In the previous session, copper closed down 3.3% and prices have now tallied a loss of 8% in four trading days.
"We are down sharply once again, as evidence grows that yesterday's sell-off has transformed itself into a full-blown correction," said Edward Meir, analyst at Man Financial, in a morning note.
William Adams, analyst at BaseMetals.com referred to the decline, in a note to clients, as "ongoing liquidation selling after what has been a strong market since February and April."
"Primarily, the damage is being done by systems-based liquidation from the investment side of the market but increasingly, there is now a fundamental edge to it," explained Martin Hayes, an analyst at BaseMetals.com.
"The U.S. housing permits were bearish on Wednesday, and there is a lot of speculation that Chinese buying will slow -- expectations are for another sizeable rise in warehouse stocks in Shanghai on Friday," he said in e-mailed comments.
Also on Nymex, July silver fell 4.7 cents to finish at $12.883 an ounce, ending a bit above the more than two-month, intraday low of $12.765.
July platinum shed $7.90, or 0.6%, to close at $1,317.90 an ounce, but June palladium tacked on $2.90 to end at $360.40 an ounce.
Inventories and indexes
On the supply side, gold warehouse inventories were unchanged at 7.71 million troy ounces as of late Wednesday, according to Nymex data. Silver supplies were unchanged at 132 million troy ounces, while copper supplies stood at 31,379 short tons....
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Mining companies' projects plagued by delays - industry executive
Very few of the much-hyped mining projects that have been the talk of the metals community for years actually make it to production as planned, president and chief executive of Vancouver-based Eldorado Gold Corp
"Very few projects run the gauntlet, and the train wrecks are now starting to appear," Paul Wright said, speaking at the World Mining Investment Congress in London.
Projects that have been discussed for years have run into stumbling blocks such as environmental opposition, technology problems, cost overruns or lower-than-expected output levels that leave the end result a long way from initial expectations, Wright noted.
The nickel sector, for instance, has been plagued by delays to projects that have created deficit conditions and driven prices to all-time highs above $50,000 a metric ton, a rise of 67% since the start of the year.
These projects include budget problems at BHP Billiton estern Australia Ravensthorpe nickel project and delays to obtaining permits required for European Nickel PLC's aldag nickel project in Turkey, amongst many others.
This makes reserve replacement a key issue for the metals and mining sector going forward, he said.
"We've seen decades of low metals prices and a lack of incentives by the industry to add to reserves or resources," Wright said. "Exploration takes extended periods of time to meet success - projects take on average between 7 and 10 years from initial discovery to first production," he added.
Other challenges for the mining sector include the lack of human resources and still-low margins at projects, despite high commodity prices.
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