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Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 05/17/2007 : 18:14:33
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I locked the old bullion news. I want to keep these to one page so it is easier to access.
Post away.
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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 - 05/17/2007 : 18:57:57
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Than you for the update Ardent Listener, we will try to keep postings to one page in the future.
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Gold glows on back of clean-air movement
By Ambrose Evans-Pritchard
Last Updated: 2:30am BST 17/05/2007
Gold is coming of age as an industrial metal in a host of uses from car catalysts to air conditioning and health care, adding 451 tonnes to global demand last year - roughly offsetting sales by central banks.
The World Gold Council is counting on a future surge in demand for use in diesel catalysts following the invention of a new technology by the US firm Nanostellar that is more efficient and cheaper than platinum.
Gold costs $663 an ounce, while platinum has soared to $1,320 as car companies scramble to meet stricter clean-air rules.
James Burton, the WGC's chief executive, said the design could cut noxious emissions by 40pc more than existing platinum catalysts. "With the diesel automobile market continuing to grow strongly across the globe, this is very exciting," he said.
For now, however, investment demand remains the key hope for gold bugs waiting to see the metal break out of its lacklustre trading range.
Rob McEwen, chief executive of US Gold Corp, predicted that gold would soon smash through its 25-year peak of $730 in May 2006. "I expect it to test $850 by the end of 2008, and by the end of 2010, north of $2,000, possibly $5,000," he said, insisting that dollar troubles would eventually prompt a flight to the safety of bullion.
Yesterday, however, the dollar was in fighting form after robust housing data in the US, sending gold tumbling $12 an ounce to $661. The shares of Peter Hambro Mining sank 11.2pc in London on fears of a fresh dispute with the Russian government over stated reserves.
The WGC said consumer demand in India and China was the key impetus for growth of the gold market in the first quarter of 2007. India's thriving middle class drove up sales by 50pc year-on-year, snapping up jewellery in advance of the Akshaya Thritiya festival.
In China, the Year of the Golden Pig has boosted Chinese demand by 31pc, with affluent city buyers opting for 24-carat bars of pure gold.
The red-hot flow of funds into Exchange Traded Funds has slowed to 36 tonnes, suggesting that western investors are becoming sated with holdings after accomeulating nearly 700 tonnes in ETFs since 2003.
One of the properties of gold is that it can serve as a catalyst at low temperatures. Japanese toilets now use gold filters to break down smelly nitrogen compounds, purifying the air. Gold particles can clear smoke in air conditioning systems in buildings, or in gas mask respirators to prevent CO2 poisoning down mine shafts or in airplanes.
The pharmaceutical company CytImmune has developed a new cancer treatment using gold nanoparticles to target tumours, a treatment that appears to reduce toxic side effects.
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 - 05/17/2007 : 19:22:14
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quote:
Originally posted by pencilvanian
Than you for the update Ardent Listener, we will try to keep postings to one page in the future.
Thanks, but that's my and the other moderator's responsibility to close them after they pass one page. I'm happy they fill fast.
BTW, great post about the industrial use of gold.
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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 - 05/18/2007 : 16:47:09
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Esoteric uses keep silver demand flying high
In an address to the World Mining Investment Congress in London, Silver Standard President and CEO, Robert Quartermain, who also is the Vice President of the Silver Institute, devoted most of his address to factors affecting silver supply and demand rather than promoting his own company - which indeed has much going for it - to the audience of bankers, brokers, fund managers, mining company executives and investors.
Like virtually all the base and precious metals, low prices for many years meant that exploration and new mine openings have been rare and silver supply has been falling short of demand - even though its monetary element has diminished, as has the main industrial usage in the photographic sector. Pure silver mining operations are relatively rare in any case and the metal often is produced as a byproduct to gold, copper or lead and zinc - all of which suffered from the exploration malaise from low metal prices - or with one or more of these metals as a co-product, or at least as a significant revenue contributor. Only now are significant new silver producing operations beginning to come on stream, but these are hardly replacing the declining output from many older and declining producers.
Although the photography market may be diminishing, this was also notable for a substantial recycling element, which brought a high proportion of the photographic supply back to the market as ‘scrap'. As the photographic usage dies, then so will the recycling.
But it is silver's bivalency which is perhaps the key, which makes the metal highly reactive to the extent that, among other things, it is a natural biocide which means growing medical usage - and it is being used in clothing too for people in arduous occupations - like the military. It has uses in combating many viruses like legionella - and in the UK perhaps in the fight against hospital borne diseases like MRSA.
In electronics silver is the most efficient conductor of electricity so is finding increasing usage in this sector. Meanwhile legislation in some countries to remove lead from solders is opening up another big comeulative usage area in terms fo silver-tin solders.
So, Quartermain makes an excellent case for continuing strong demand for silver. He feels that any balanced portfolio should contain an element of silver - either as physical metal, ETF or silver mining stocks, and as far as the latter is concerned he would not argue against Silver Standard being a key part of this.
Although the company has existed for many years without mining metal, the big Pirquitas deposit in Argentina is ready to move to the production phase, while there are then a succession of projects in Peru, Mexico Argentina again and Canada waiting for production decisions.
All are primarily silver deposits except Snowfield in British Columbia, Canada, which is a gold deposit which looks to have potential as a big open pit gold operation with decent grades. So far exploration is in the relatively early stages here, but it looks to have the potential to be a major gold resource should big tonnages be proved up which could be of interest to one of the gold majors - which in turn could make it a finance source to be used to continue development of Silver Standard's silver prime targets.
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silver junior news
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Courtesy Hoover's Inc - China base metal production - nickel production in April 18.2% higher than same month 2006 - 23.8% higher in first quarter of 2007 compared to same quarter in 2006.
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UPDATE 5-Gold bounces off 2-month low as buyers return
Excerpts
Gold prices finished higher in New York afternoon trade on Friday after a fall to two-month lows attracted physical buyers and bargain hunters back to the market, traders said.
But the metal had the potential to test new lows because of large speculative trading positions. Sentiment was also down because of a significant decline in gold held by a U.S.-based exchange-traded fund (ETF). .....
The market is very whippy," said David Holmes, director of precious metals sales at Dresdner Kleinwort. "The market had begun to focus on 'how low can it go'...and then the funds have come in this morning and bought it.
"We've also seen some physical demand for gold this morning."
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 - 05/19/2007 : 12:13:55
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Now we find out why gold took a hit, it's Spains fault...
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Spain risks crisis over vanishing reserves
Key excerpt
Over the past two months the Banco de España has sold off 80 tonnes of gold,
flooding the world market with enough bullion to dampen the usual spring rally.
The bank has reduced its holdings of US Treasuries, British gilts, and other investments at a similar rate.
Total reserves have now fallen by two thirds from €41.5bn in early 2002.
Greece and Portugal have seen a similar drop.
By contrast, the overall reserves of the eurozone system have remained stable. France (€76bn), Germany (€86bn), Italy (€59.5bn) have all kept holdings at full strength since the launch of the euro.
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 - 05/20/2007 : 16:44:28
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Buffett does bullion (sort of)
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Berkshire Hathaway to buy jewelry firms
NEW YORK, May 18 (Reuters) - Warren Buffett's Berkshire Hathaway Inc. said on Friday it will acquire jewelry manufacturers *Bel-Oro International* and *Aurafin LLC.* Financial terms were not disclosed.
Berkshire Hathaway said that upon consummation of these acquisitions, the two firms will be combined into the newly formed Richline Group.
The transactions are expected to close during the second or third quarter of 2007.
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 - 05/21/2007 : 16:15:43
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Nickel may rise 20%: Credit Suisse
The price for nickel, used to make stainless steel, may rise 20% as a shortage of smelters to process ore into metal constrains supply, Credit Suisse Group said in a report.
Nickel may reach US$65,000/t in the "near term," Credit Suisse London-based analysts led by Jeremy Gray and Eily Ong said.
Smelting output may grow at 4.6% this year compared with demand growth as high as 5% should stainless steelmakers rebuild inventories and global economic growth increase, the report said.
Nickel for immediate delivery rose to a record US$54,050/t in London on May 15 as China`s economic growth fueled demand for the metal.
Cost overruns and delays at BHP Billiton`s Ravensthorpe and Cia Vale do Rio Doce`s (CVRD) Goro projects, the two largest nickel mines under construction, exacerbated supply shortfalls, helping drive price increases.
"Prices will remain strong over the next two years given the lack of supply growth until 2009 at the earliest," Gray and Ong wrote in the report. "The current profile of new smelters is unlikely to be enough to feed ongoing strong demand from the stainless steel industry in the next two years."
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Copper Rises in London as Stockpiles Decline; Aluminum Gains
By Chanyaporn Chanjaroen
May 21 (Bloomberg) -- Copper gained most in more than two weeks in London as a drop in stockpiles signaled growing demand. Aluminum and zinc rose.
Inventories monitored by the London Metal Exchange fell 0.9 percent to 140,075 tons, the lowest since Nov. 2, the exchange said in a daily report. Goldman Sachs Group Inc. raised its 2007 copper price forecast 6.5 percent on speculation ``strong'' growth in China will offset ``weakness'' in U.S. demand.
Stockpiles are at ``historically low levels,'' Goldman Sachs analysts, led by London-based Jeffrey Currie and James Gutman, said in the report. The price of copper will trade around $7,500 a ton over the next 18 months, they said. Goldman Sachs is the world's largest securities firm by market value.
Copper for delivery in three months gained $138, or 1.9 percent, to $7,410 a metric ton as of 4:06 p.m. Earlier, it gained as much as 2 percent, the largest intraday increase since May 3. The contract posted the largest weekly decline since Feb. 2 last week, falling 7.9 percent.
Copper has dropped 11 percent from the 11-month high traded on May 4 on concern China's demand growth may slow following a price rally and government interest rate increases, Goldman Sachs said. Global economic activity will stay firm through 2008, underpinning demand growth for metals and keeping any copper surplus ``relatively small,'' the bank said.
Demand for copper will lag behind production by 20,000 tons this year compared with a deficit of 109,000 tons last year, according to Goldman Sachs.
Chilean Dispute
The Chinese central bank raised the one-year benchmark lending rate to 6.57 percent on May 18, from 6.39 percent, stoking concern about a slowdown in demand growth. China is the world's largest user of all industrial metals.
The concern is ``already in the price,'' Neil Buxton, managing director of London-based GFMS Metals Consulting Ltd., said by phone. While the rate increase may slow growth ``slightly,'' it won't be enough to cause ``substantial'' effects on metals demand, he added.
Copper is also supported by a labor dispute in Chile that may lead to a supply disruption. Workers at the Dona Ines de Collahuasi copper mine, the country's third largest, demanded wage increases from owners Xstrata Plc and Anglo American Plc after the metal price tripled since the last contract in 2004.
A union representing about 700 workers at the mine asked management on May 18 for a raise of 8 percent above inflation, union President Hernan Farias said in a phone interview from northern Chile. That would be more than three times the 2004 wage increase, he said.
Collahuasi will produce 433,000 tons of copper this year, the state-run Chilean Copper Commission estimates. That would be about 2.6 percent of global output.
Aluminum, Nickel Zinc
Goldman Sachs also raised this year's price forecasts for aluminum, nickel and zinc. Aluminum will average $2,749 a metric ton this year, 11 percent higher than the previous forecast of $2,487. Nickel will average $40,327 a ton, up 8.4 percent from a previous forecast, and zinc's estimate was raised 7.4 percent to $3,448 a ton.
Aluminum added $10 to $2,860 and zinc rose $40 to $3,760.
Aluminum production averaged 100,300 metric tons a day in April, up from 98,200 tons in March, the London-based International Aluminium Institute said today. Total output was 3.01 million tons last month, 12 percent more than a year earlier, according to the IAI.
The data include Chinese figures from the China Nonferrous Metals Industry Association, as the IAI doesn't compile its own statistics from the world's largest producer of the metal.
Nickel stockpiles gained 3.4 percent to 4,986 tons, according to the LME report, the highest since the end of April. The price of the contract for delivery in three months was unchanged at $50,400 a ton.
Nickel's so-called canceled warrants, or orders for metal stored at LME-monitored warehouses, dropped 20 percent to 702 tons, the LME said. That's the lowest since Feb. 13 and may indicate a slower pace of declines in LME nickel stockpiles, which have plunged 78 percent in the past 12 months.
Among other metals traded on the exchange, lead gained $40 to $2,100 and tin added $125 to $14,125.
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Palladium Rises Most This Year on Demand; Platinum Declines
By Millie Munshi
May 21 (Bloomberg) -- Palladium futures in New York rose the most this year on forecasts for robust demand for the metal used in jewelry and emission-control devices. Platinum fell.
Palladium sales will rise 6.5 percent in 2007, spurred by consumption by automakers, according to consultant CPM Group. The metal, up 9.5 percent in the past 12 months, may jump 34 percent to $500 an ounce by yearend, said Gerry Schubert, a director of metals in London at Fortis, Belgium's biggest bank.
``The fundamental picture for the market continues to improve,'' Neal Ryan, director of economic research at New Orleans-based Blanchard & Co., wrote in a note to clients today. Investor interest is adding to demand, he said.
Palladium futures for June delivery gained $9.05, or 2.5 percent, to $374.30 an ounce on the New York Mercantile Exchange, the biggest one-day percentage increase since Dec. 29.
The price jump helped boost shares of Anglo Platinum Ltd., which mined more than one-third of total palladium production last year, according to Johnson Matthey Plc. The shares rose 6.1 percent to 1,210 rand in Johannesburg, the largest gain since Nov. 20.
``Palladium demand has been up, up, up,'' Torrance Hoover, president of Hoover & Strong Inc., a precious metals manufacturer in Richmond, Virginia, said last week. Palladium sales at the company may double this year as the metal's use in jewelry increases, Hoover said.
Wedding Bands
North American jewelers doubled their use of the metal last year to 40,000 ounces and European sales increased for the first year in at least a decade, London-based Johnson Matthey said. The jeweler Fortunoff started selling palladium wedding bands in November and said the metal already represents 10 percent of the market.
``We definitely expect the sales to keep increasing,'' said Ruth Fortunoff, vice president of jewelry merchandising at Fortunoff.
Palladium sales at Blanchard & Co., the largest precious- metals retailer in the U.S., have quadrupled in the past two years. Blanchard sells palladium in one-ounce bars and Maple Leaf palladium coins from the Canadian Mint.
Platinum fell in New York as the dollar gained against the euro and the yen, reducing the appeal of the precious metal as an alternative asset.
The U.S. currency rose to a three-month high versus the yen and strengthened against the euro. The dollar has gained for three straight weeks against the euro, the longest rally since October. Platinum has increased 15 percent this year, partly on speculation of rising investor demand.
``Platinum is reacting to the rebounding dollar,'' said Daniel Vaught, a commodity analyst at A.G. Edwards & Sons Inc. in St. Louis.
Platinum futures for July delivery dropped $6.50, or 0.5 percent, to $1,319.70 an ounce on the Nymex. The metal reached a record $1,353.80 an ounce on May 7.
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Gold rises but near-term sentiment bearish
Gold edged higher in New York afternoon trade on Monday after hitting a two-month low last week, but traders said sentiment has turned bearish, pressuring the precious metal in the short term.
Gold fell as low as $657.30 an ounce before rising to $662.30/663.80 at 3:27 p.m. EDT (1927 GMT), up from $660.90/662.40 late on Friday, when prices fell as low as $655.50.
Most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange settled up $1.80 at $663.80 an ounce, after trading between $657.50 and $664.60.
"We have got a few important data points coming out late this week, especially in the euro-zone, and I can imagine that until then we are going to stay in a relatively quiet market," said Michael Widmer, director of metals research at Calyon Corporate and Investment Bank.
"Although I am still bullish for the full year, we are now moving out into the summer months and gold is generally not that strong during the period."
Spot gold on Thursday tumbled as low as $653.40, its weakest since March 20, but that fall stimulated physical interest and fund buying on Friday.
"The only reason why we see a bit of profit-taking here is on the back of the euro/dollar. The market is very quiet, but we expect it to find some support around $660 or slightly below," said Frederic Panizzutti, metals analyst at MKS Finance.
The dollar hit a five-week high against the euro and a three-month peak versus the yen on Monday. A higher dollar makes gold more expensive for holders of other currencies.
BULLISH LONG TERM
Analysts said bullion market sentiment among holders of large speculative accounts of gold was changing, with investors becoming bearish in the near term.
But long-term bullish sentiment remained intact.
Switzerland-based Novartis's pension fund said it planned to invest 4 percent of its 14 billion Swiss francs ($11.37 billion) in precious metals.
The U.S. Commodity Futures Trading Commission said in its weekly Commitment of Traders report that speculators trimmed their net long position in U.S. gold futures by 16 percent in the week to May 15.
"Although there has been some liquidation of long positions, the net fund length in gold remains at elevated levels, which we believe continues to leave gold susceptible to price corrections should speculative enthusiasm towards the complex lessen," Barclays Capital said in a research note.
But net long positions in platinum hit another all-time high of 606,700 ounces.
Spot platinum gained $3 to $1,310/1,315 an ounce compared with its previous finish in New York.
In other precious metals, silver was last quoted at $13.05/13.09 an ounce, up from $12.91/12.96 in late in New York on Friday.
"The outlook for silver does not look promising in the interim, with the metal still likely to come under pressure. A period of consolidation in the high-$12's is likely," Standard Bank said in a note.
Palladium was quoted at $368/373, up from $360/364 an ounce late in the U.S. market on Friday.
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Gold may peak to $700 in '08 on China demand
Bloomberg / Mumbai May 22, 2007
Gold prices may peak in the first half of next year driven by rising demand for luxury goods in India and China, according to Westpac Banking Corporation.
Gold for immediate delivery may trade above $700 an ounce at the end of this year, Huw McKay, senior international economist at Sydney-based Westpac, said on May 17. Gold has averaged $659.34 so far this year after reaching a 26-year high of $730.40 last May.
Demand in India, the world’s largest buyer of the precious metal, rose by half in the first quarter from a year earlier, while demand in China gained 31 per cent, the London-based World Gold Council said last week. Westpac’s McKay expects prices to remain at historically high levels for the next three years.
“The demand for gold is growing” in China, Ian roostererill, chief executive officer of Gold Fields, said today. “Look at the new found wealth in that country and the burgeoning middle classes and their demand for gold, it has been very, very strong despite high prices.”
Gold for immediate delivery rose as much as $2.35, or 0.4 per cent, to $664.10 an ounce, and traded at $662.64 at 11:43am Perth time. It’s risen 4.1 per cent so far this year and traded at an 11-month high of $694.25 on April 23. roostererill was speaking at a two-day gold conference being held from today in Perth by publisher Paydirt Media Pty. The conference is being attended by the world’s four largest gold producers, Barrick Gold Corp, Newmont Mining Corp, AngloGold Ashanti and Gold Fields. Westpac’s McKay is also attending.
Jewellery purchases, accounting for about 75 per cent of gold demand, jumped 17 per cent to 573 tonnes as consumers grew more comfortable with gold above $650 an ounce, the London-based Gold Council said in a May 16 statement. Demand from India rose to 211 tonnes and Chinese demand rose to 90 tonnes.
“China is a major emerging market, there is tremendous wealth building up amongst the middle class there, as it is in India,’’ Gavin Wendt, senior resources analyst at Fat Prophets, said on May 18. “They are spending their money on luxury goods and certainly gold jewellery would be near the top of the list.”
The Reserve Bank of India last month forecast economic growth of 8.5 per cent in the year ending March 31. China’s economy, which grew 11.1 per cent in the first quarter, is expected to expand 10 per cent this year, according to the IMF.
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Lack of big find keeps gold price buoyant - Gold Fields
SYDNEY -
A failure to find the next mother lode was helping prop up gold bullion prices, the head of South Africa's Gold Fields Ltd., the world's fourth-largest gold miner, said on Monday.
"There is a lack of exploration expenditure and a lack of discovery of any significant size," the company's chief executive, Ian roostererill told a conference in the Australian city of Perth.
"The world is consuming 85 million ounces of gold a year but the industry is by no means finding and replacing that amount," he said.
roostererill said the gold sector was firmly entrenched in a bull market and predicted there was still some way to go.
"Gold has in the past decade become the barometer of the geo-political state of the globe," he said.
"With the increasing hostilities over the last 10 years, we have seen sentiment come under gold from the prices of around US$200 an ounce in about November 2000 to the current range of US$600-700 an ounce," roostererill said.
Spot gold sold for a record $850 in 1980 and traded as high as $730 an ounce in May 2006. The price has since recoiled though it remains well above long term averages. At 0353 GMT, an ounce of gold cost $662.25.
roostererill said the "stupidity" of miners hedging future production had fallen by the wayside in favour of direct exposure to spot market prices.
"Most analysts now recognise hedging was a fault -- it is like eating your young -- we have come to recognise the craziness of selling something at a price delivery point in the future which is at a price that guarantees that you cannot replace it.
Gold Fields, which earlier this month posted third quarter gold production of 989,000 ounces, has long been critical of hedging gold.
Hedging has divided the world's mining companies, with rivals such as Newmont Mining Corp. and Rio Tinto Ltd./Plc. also refusing to hedge.
Start-up mining companies are sometimes forced by lenders to hedge at least part of their projected gold yield to cover loans.
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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 05/21/2007 16:22:43 |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 05/22/2007 : 17:33:07
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A guest (Sorry,I didn't catch his name) on MSNBC today was saying that his firm was down playing the idea that a lot of new copper would soon be hitting the market. He went on to say that he has seen those predictions or report before and no more than 10% more ever hits the market. He remains bullish on copper.
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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 - 05/22/2007 : 18:02:09
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My thought on the copper subject:
Even if a major strike is found in China/India/South America/anywhere, it will still be a few years before copper form the new mine is dug up in enough quantities to effect the price.
Skilled mining labor is in short supply, metals refiners have limited excess capacity to process up the new ore supply, mining equipment is months or years behind in delivery, most speculators fail to realize that a new mine does Not mean instant supply to the market.
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Speed bump for metals day. Let the weak hands flee now, they will be stampeding back in when the prices stabilize and rise. Much like buying stock, it is the long term investor, not the day trader, who ends up with profits. Just take the decline in stride,
up a little, down a little, sit back and wait for the upswing sure to come.
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DJ BASE METALS: Comex Copper Falls Amid Chart-Based Selling
By Allen Sykora
Of DOW JONES NEWSWIRES
Copper futures tumbled Tuesday in mainly technically oriented trading,
analysts said.
The most-active July copper contract fell 9.80 cents to settle at $3.3025 per
pound on the Comex division of the New York Mercantile Exchange.
"The combination of a firm U.S. dollar and weak energy prices is probably
weighing on copper to some extent," said Dan Vaught, futures analyst with A.G.
Edwards. "And losses in the precious metals are also weighing on the market."
As copper was closing, the euro had fallen to $1.3454 from $1.3469 late
Monday, June crude oil was 72 cents lower to $65.55 and June gold was down
$2.20 an ounce.
There does not appear to be any industry-specific news behind copper's
decline, Vaught said. In fact, the most recent Comex and London Metal Exchange
warehouse inventory data both showed declines, which is supportive.
Thus, Vaught and others described much of Tuesday's decline as technical in
nature.
In particular, the futures backed down after a bounce from last week's lows
had carried the market up to failed support that has since turned into
resistance, around the $3.44 to $3.45 area, said Frank Lesh, broker and futures
analyst with Future Path Trading.
Vaught said he had anticipated more follow-through after Monday's rise,
perhaps to the $3.50 area. Thus, the pullback coming when it did is likely to
be perceived bearishly by technicians who had been looking for more of a
bounce, he explained.
Lesh commented that there seems to be fund liquidation generally in the base
metals. "And there may be some people back on the short side of copper now," he
added.
Some metals traders may already be starting to exit positions ahead of the
upcoming three-day U.S. Memorial Day weekend, wanting to take extra time off,
traders noted.
The futures closed right around an initial support level Vaught put at $3.30
a pound. Below this, Lesh put support for July copper around the double-bottom
from last week - $3.2285 on Thursday and $3.2300 on Friday. Further support
lies around $3.13 to $3.07.
The market has little U.S. economic data to focus upon before Thursday, when
it gets durable-goods orders and new-home sales. The market will be watching
those reports to see what the implications are for copper demand, as well as
the report's influence on the dollar, which in turn also affects movement of
metals prices.
"We're also watching the U.S.-China Strategic Economic Dialogue to see the
ramifications of that," said Lesh.
Other analysts have also noted this is a talking point in the market, as
traders are anxious to see whether there is progress on differences between the
two nations, as China runs a huge trade surplus with the U.S. If there is no
resolution, there is the potential for trade sanctions, which would influence
equities or currencies and ultimately metals, some have said.
Otherwise, the key for the market going forward will be whether China remains
strong buyers - as has been the case in recent months - especially over the
summer months, Vaught said.
Inventories of copper stored in London Metal Exchange warehouses fell 1,650
metric tons Tuesday, leaving them at 138,425. The most recent Comex inventory
data, released late Monday afternoon, were down 463 short tons at 30,916 short
tons.
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U.S. gold finishes lower, short-term weakness seen
Excerpts
U.S. gold futures finished lower on Tuesday on a combination of higher dollar, weaker oil prices and chart-based sales, and market-watchers said the precious metal could fall further in the short term.
.....Jon Nadler, analyst at Kitco Bullion Dealers, said in a note that reduced physical buying from India because of the monsoon season was hurting gold. He also cited a rising dollar and falling crude prices for gold's decline.
The euro inched down against the dollar, trading near a six-week low. A stronger greenback makes gold pricier for holders of other currencies.
....StreetTRACKS gold shares, the world's largest gold-backed exchange traded fund (ETF), reported that it has dropped a substantial amount of bullion holdings over the past several sessions, signaling reduced exposure by investors due to weaker prices.
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Quotes from the week - Citigroup report -
"Nickel demand has proved stubbornly resilient despite spiraling prices....The supply threat comes from low-tech Chinese nickel pig-iron, rather than much-vaunted PAL hydromet mega-projects. The irony is rich."
Metals Insider Week in Review posted yesterday - "The temporary closure of Dudinka, the far-northern export port for Norilsk Nickel, may mitigate against a sharp rebound in LME stocks any time soon, but the way that this news item was used by some traders to explain nickel’s steadiness last week was disingenuous. It happens every year—it’s called “spring”—and really shouldn’t surprise anyone (make a note in the 2008 calendar, it will happen again)."
"Privately-owned Chinese company Jiangsu Weida Petrochemical Group is near to commissioning the first stage of its 18,000 tpy electrolytic nickel project next month, aiming to become the second-largest nickel producer in China"
"A cut in stainless steel scrap buying from European mills is expected to continue into Q3, according to Michael Wright of ELG Haniel UK, speaking at the Bureau of International Recycling congress in Athens."
"Japanese crude steel production rose 4.1 percent year-on-year to 9.74 million tonnes in April, according to preliminary figures from the Japan Iron & Steel Federation (JISF)"
ThyssenKrupp (steel maker)May Buy Less Nickel as Price Increases
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JP Morgan says "crazy" to ignore commodities plays
By Dominic Lau
LONDON (Reuters) - Investors who think it is too late to get into commodities-related stock because the market has risen so much are "crazy" as prices will only go higher due to tight supply and growing demand, JPMorgan Asset Management said.
Ian Henderson, fund manager of the UK-registered JPMorgan Natural Resources Fund, told Reuters in an interview that China's latest move to rein in its booming economy would dampen speculative activity but metal inventories remained low.
"I think people are crazy not to be in it (commodities). I just can't imagine anybody being so naive as to imagine this is not a revolution like the way people have never seen before in their lifetimes," Henderson said late Monday.
"It's absurd to imagine that with the enormous amount of infrastructure going on, whether that be railroads or roads or power stations or subways or airports, this is other than a revolution in terms of demand going on."
The fund, which invests mostly in stock and is 1.18 billion pounds in size, has handed investors more than 22 percent in returns this year as of the end of April.
Its portfolio consists of: base metal and diversified 37 percent; gold and precious metals 27.5 percent; energy 25 percent; diamonds/other 8.2 percent, with the rest in cash.
Henderson, with 35 years of investing experience, also said there was no risk in investing commodities.
"For mineral producers the current situation with the arrival of China, India and other emerging markets as major commodity consumers sitting down to the table, can be likened to a hostess having prepared a dinner for eight having a further eight guests arrive for whom no food has been bought or prepared," he said.
The fund manager said that the emerging economies accounted for 29 percent of the world's gross domestic product, bigger than the United States, and were growing by 5 to 10 percent a year, supporting the demand for raw materials.
"The basic outlook is that most people imagine that mining companies will be able to bring new projects into production on time and on budget," he said.
"The honest truth is that at least in the past five years people's expectations for production growth had been almost twice as great as the actuality."
Energy supply would also remain tight as companies were finding it difficult and expensive to accelerate their exploration programmes, said Henderson, who has run the fund since 1992.
As for stock picks, the fund manager said he liked "small and micro cap" companies, where half of his fund is allocated, but he declined to give any names.
But, he added, there was good value in the larger companies.
"Among the big companies, I would buy almost all of them today. All the major companies are undervalued quite a lot. And if I have to rank them in this very minute, I would be buying Norilsk, CVRD," he said.
"Their commodity mixes are quite favourable. The markets are not valuing them using sensible forward earnings estimate. In addition, in the case of Norlisk there will be an $8 billion (4 billion pound) return of equity by way of a distribution of their energy subsidiary next 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 - 05/23/2007 : 18:16:28
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DJ BASE METALS: Comex Copper Consolidates In 'Rest Session'
By Allen Sykora Of DOW JONES NEWSWIRES
Copper futures were slightly softer much of Wednesday along with other base metals, before recouping most of their losses into the close of a session described as one of mainly consolidation.
The most-active July copper contract edged down 0.20 cent to settle at $3.3005 per pound on the Comex division of the New York Mercantile Exchange.
Copper was hurt some by general weakness in the London base metals, said Bill O'Neill, one of the principals with LOGIC Advisors.
"Lead had a correction after reaching a record high yesterday," he said. "And nickel had a second straight day of strong declines. The general tone of the LME weighed a little bit on copper."
But after copper has been softer over the last 1 1/2 weeks, some trade scale-down buying has emerged.
"And we didn't see as much fund concentration selling as we had previously,"
O'Neill said. "So I think it was more of a rest session, just consolidating the recent slide."
Otherwise, he said the generally softer tone lately may persist amid worries about recent build in Shanghai Futures Exchange warehouse inventories of copper.
Michael Gross, broker and futures analyst with Liberty Trading, also described copper as mainly in a consolidation period. The market technically is technically oriented at the moment, he added.
"We got a little bit of a bounce off the (recent) lows. But it didn't hold up," he said. "At this point, copper is trying to establish a fair price."
The market appears range-bound, he said. He put support for July copper at last week's low of $3.2285, with resistance around the $3.50 area.
One event that some traders said the market would be eyeing this week was economic meetings between the U.S. and China. So far, it appears "a little progress" has been made, but this was largely anticipated by commodity markets and thus has been largely neutral for the base metals, O'Neill said.
...Inventories of copper stored in London Metal Exchange warehouses fell 850 metric tons Wednesday, leaving them at 137,575. The most recent Comex inventory data, released late Tuesday afternoon, were down 35 short tons at short tons.
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Industry beats jewellery in silver consumption
Silver demand for industrial applications exceeded 50 per cent of the total global demand for fabrication for the first time in 2006.
The industrial demand rose to 430 million ounce (Moz) in 2006 compared with 405.8 Moz in 2005. However, the demand for the white metal from the fabrication industry slipped marginally to 840.5 Moz in 2006 compared with 848.3 Moz last year, according to the latest report, World Silver Survey 2007, released in New York on Wednesday by the Silver Institute and GFMS.
Silver fabrication entered the negative growth zone last year despite a trend towards significantly higher and more volatile silver prices. The industrial applications, a key component of the demand, posted a 6 per cent growth to 430 Moz, recording the fifth consecutive year of growth. China saw a strong growth in the industrial demand at 10.4 per cent and Japan recorded an equally impressive 10 per cent increase in 2006. The US too recorded 6 per cent increase in the use of industrial silver to 106.8 Moz.
Silver jewellery fabrication posted a nearly 5 per cent loss in 2006 at 165.8 Moz compared with 173.8 Moz last year, largely due to price-related losses in India. Jewellery fabrication in Indonesian and China, however, grew by an impressive 18 per cent and 16 per cent, respectively.
Lower fabrication in price-sensitive countries and structural shifts in taste accounted for the 7.5 Moz dip in global silverware demand last year. About 60 per cent of the silverware decline was due to India, where the price rise was evident in rupee terms. Demand from photography continued to fall, decreasing by 10 per cent in 2006 to 145.8 Moz. A bulk of the decline was because of a lower demand for photography film, owing due to a rapid growth in digital imaging technology.
Annual silver prices, led by a growing investor demand, averaged a remarkable $11.55 an ounce in 2006. At the same time, industrial demand for silver saw a fifth consecutive year of growth, despite the high silver prices, according to the report.
The report further added that last year, silver prices saw a 58 per cent increase over the average 2005 price of $7.31 an ounce. In 2006, silver prices reached the levels not seen in 26 years and were the leader compared with gold (36 per cent increase) and platinum (27 per cent increase). The primary factor driving silver prices was the continued strength of investment demand, which was sustained from 2005 and has remained resilient in 2007.
Global silver mine production edged up fractionally in 2006, with notable gains in Latin America and Asia. The total silver mine production reached 646.1 Moz last year, with Peru, Mexico, China, Australia and Chile accounting for the top-five silver mining countries.
Last year, silver generated at primary mines fell by 10 per cent to 161.4 Moz, representing 25 per cent of global silver production. Cash costs at primary silver mines contracted last year by 16 per cent to average at $2.74 an ounce.
The supply of silver from above-ground stocks on a net basis dropped by 4 per cent in 2006 to 194.4 Moz. The decline was the result of a shift of net producer hedging to the demand side. Total scrap supply provided the market with 188 Moz in 2006, virtually unchanged from 2005.
The net government sales crept up to 77.7 Moz in 2006. The increase in government sales in 2006 was the result of marked increases in Russian sales, coupled with ongoing sales from the Indian government silver stocks. Elsewhere, a decline in sales from China partly offset these increases.
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UPDATE 5-Gold rises as dollar weakens, oil gains
(Reuters) - Gold drifted higher in New York afternoon trade on Wednesday as the dollar slipped against the euro after early gains and oil prices strengthened.
Analysts remained positive on gold's long-term outlook, saying a possible decline in the dollar on the back of concerns related to U.S. economic growth might generate more interest in gold among investment funds.
Gold rose as high as $664.70 an ounce and was quoted at $660.70/661.20 at 2:47 p.m. compared with $658.80/$659.30 in New York late on Tuesday.
....The correlation with the dollar is still quite strong and certainly yesterday and today we have seen gold tracking the dollar," Suki Cooper, precious metals analyst at Barclays Capital in London, said.
"In a very short term, prices will probably consolidate around these levels before the next push up. We do see prices rising above $700 in the third quarter, driven by a number of factors," she said.
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Upbeat Forecast Lifts Silver
By Simon Constable
TheStreet.com Staff Reporter
Silver prices were rallying Wednesday as the dollar weakened and word emerged that interest from India for the metal has been strong.
July-dated silver contracts were ahead by 14 cents at $13.13 an ounce in recent New York futures market action.
"We have seen tremendous physical demand for silver imports into India of late," says Andy Montano, director of precious metals at Toronto-based bullion bank ScotiaMocatta. He also adds that the greenback's slight softness overnight was having a buoying effect on the metal's price.
The U.S. dollar was recently trading at 121.48 yen, down slightly from 121.58 yen late Tuesday. The euro was selling for $1.3459, up from $1.345 previously. The prices of dollar-denominated assets, such as the precious metals, tend to increase as the value of the U.S. currency declines.
Also adding shine to silver was a bullish annual silver survey from London-based specialty metals consulting firm GFMS. The report's authors project last year's robust market will continue through 2007 with conditions remaining "supportive of prices well into double-digits," meaning above $10 an ounce.
Strong investment demand, led by the introduction of the silver exchange-traded fund, iShares Silver Trust, drove the average price for the metal up 58% in 2006. The ETF absorbed 121 million ounces following its May launch. Meanwhile, demand for silver used in industrial applications fell only 1% during the year despite the higher prices, the report states.
Gold prices were rallying also, with June-dated futures contracts up $2.10 at $662 an ounce. The gold bullion ETF, streetTracks Gold Shares was adding around 1%.
Underling the price action in gold was activity by traders switching positions from near-dated contracts to later-dated ones. Open interest in the June contract now totals 15.5 million ounces, compared with 8.2 million for the August-dated instrument.
In the precious metals patch, HSBC was busy changing ratings on a slew of miners, due mainly to recent stock price movements. Agnico-Eagle Mines AngloGold Ashanti and Royal Gold were all upgraded to overweight from neutral...
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Long read ahead, useful information, though.
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World Silver Survey forecasts double-digit silver prices will continue
The World Silver Survey 2007, released today by the Silver Institute, forecasts that the current fundamental/supply demand picture for silver is "at least supportive of prices well into double-digits," in the absence of a major externally-driven setback to industrial demand.
The authors of the survey - London-based metals consultant GFMS - suggested that "for silver to break out to the upside or downside would therefore seem to require intervention from investors." A downside could occur if a slide in global GDP growth prompted investors to liquidate their positions.
Nevertheless, GFMS's research revealed that, "at the present time, investors still look set to expand their investment in commodities."
The average silver price averaged US$11.55 in 2006, an increase of 58%, and a 26-year high, according to the survey. "Equally remarkable is that the price has been sustained at such high levels since the ETF-driven peak of close to $15 was reached in May 2006."
GFMS noted that the year-on-year rise in silver prices was also strong compared to gold, which rose 36% and platinum, which increased 27%. Investment was the prime driver behind the overall gains with the launch of the silver ETF on April 28, 2006.
"The relatively illiquid nature of silver no doubt contributed to its gains being greater than gold's," the survey asserted, "but the yellow metal's differing response to a bull market ...must also have been significant."
Silver's price volatility almost doubled to 45% in 2006. The trading range also jumped to 53%. Price volatility was greater in the second quarter of last year at 69% whereas the least volatile quarter was the fourth-which was believed to have seen stronger buying in the physical markets--at just under 28%, according to the survey.
"Besides its own appeal, silver has also benefited from commodities in general being in vogue and, in particular, its traditional strong relationship with gold, which of course has also enjoyed a powerful investor-led rally."
"Looking ahead, GFMS expect that the future of the yellow metal will remain of paramount importance to the silver price, particularly as such an exogenous shock that would boost silver more than gold, such as the launch of the first silver ETF, is unlikely to appear in the near future."
INDUSTRIAL DEMAND
At the same time, industrial demand for silver resulted in a fifth consecutive year of growth. Last year represented a record for the United States with respect to total industrial silver use, posting a 6% increase to 106.8 million ounces, "illustrating how this area of demand has little short-term price sensitivity and is driven instead by external factors such as technology and the level of industrial production."
Total industrial demand exceeded 50% of total fabrication demand for the first time in 2006. "Looking ahead, demand is likely to remain relatively untroubled by prices with a $11-$14 range," GFMS predicted. However, GFMS also warned that with the hefty percentage of industrial silver use comprising overall fabrication demand, "silver is vulnerable to any major setback in global industrial production."
"In 2007, jewelry and silverware demand ought to remain fairly robust unless prices reach new highs," according to the survey. "Photographic demand will fall further in 2007, but the drop in volume, as opposed to in percentage terms, should moderate."
GFMS found that silver jewelry is winning the youth vote as younger consumers view yellow gold as dated or flashy. Silver jewelry sales are also drifting toward well known brands.
Jewelry fabrication demand posted a 5% fall to 165.8 million ounces in 2006, largely due to higher prices which generated a 28% slump in India. However, China and Indonesia reported respective fabrication gains of 16% and 18%.
Lower fabrication in prices sensitive countries and structural taste shifts account for the 7.5 million ounce dip (11%) in global silverware demand to 59.1 million ounces in 2006. About 60% of the silverware decline was due to India. However, Russia has bucked the global trend as the demand for silverware has increased dramatically in recent years, according to the survey.
Meanwhile, global silver coin fabrication sank to below 40 million ounces for the first time in three years.
The largest segment of industrial demand, electrical and electronics fabrication, benefited from higher sales into consumer electronics, the automobile sector, and the photo voltaic industry, which achieved notably higher growth. "It will be industrial applications that will ensure the sector continues to grow in the future when metal prices retreat, and investors move away to other market opportunities," GFMS declared.
MINE PRODUCTION
Global silver mine production reached 646.1 million ounces in 2006 with notable gains in Peru, Mexico and China. However, a 28% drop in Australian output took its toll, as production declined 21.7 million ounces chiefly due to events at BHP Billiton's Cannington mine in Queensland, formerly the world's largest silver operation.
The decline of the ore grade at the Eskay Creek gold mine in Canada, which is planned for closure nest year, accounted for a significant portion of Canada's overall silver production losses.
More than 70% of silver output is as a by-product of other metal mining. Silver generated at primary mines declined 10% to 161.4 million ounces, representing 25% of global silver production. Cash costs at primary silver mines decline by 16% to average $2.74/oz.
Pan American's Morococha mine in Peru took the title of the lowest cost silver mine with full year cash costs reported at a negative $3.71/oz (after byproduct credits were taken into account), a $6/oz year-on-year reduction.
The top five silver producing nations in 2006, respectively, were Peru, Mexico, China, Australia, and Chile. The top five silver producing companies were Mexico's Industrias Peñoles at 46.9 million ounces, Poland's KGHM Polska Mied#378; (a copper company) at 39.9 million ounces, Australia's BHP Billiton, 37 million ounces, Kazakhstan's Kazakhmys, 21.5 million and Russia's Polymetal, 17.3 million ounces.
GFMS forecasts an uninterrupted global mine supply increase through 2008, with a 3% rise in 2007. The survey predicts that Australian silver production will recover, while fresh mine supply in South America and Mexico will come on line.
Interestingly, GFMS expressed its confidence that both Apex Silver's San Cristobal project and Coeur d'Alene's San Bartolome will receive final approvals from the Bolivian government.
FINANCIALS
Silver from above-ground stocks on a net basis dropped by 4% in 2006 to 194.4 million ounces as a result of a shift of net producer hedging to the demand side. GFMS estimated that mine production account for 77% of total supply over 2006. "It is finally interesting to note that, although in respect to confidentiality GFMS cannot disclose a breakdown between allocated and unallocated stocks, there was a clear shift from the latter and into the former over the course of the year"
Net government sales increased by 18% to 77.7 million ounces in 2006 as a result of marked increases in Russian sales, coupled with ongoing sales from Indian government silver stocks. "The lift in government sales was more than offset by producers collectively abstaining from hedging, in spite of the very high forward prices available at times last year." Government stocks of silver are estimated to have fallen by nearly 77.7 million ounces last year to reach 137.2 million ounces by year-end, according to GFMS.
The delta-adjusted silver hedge book at year-end 2006 was reported at 82 million ounces, an 8% decline from the year-end 2005 position. "At first glance, it was perhaps surprising that the 58% rise in the average spot price did not do more to stimulate fresh hedging," GFMS noted. "Part of the explanation was a continued shift in hedging practices, which has seen a number of producers lock in silver prices using silver purchase agreements rather than the forward market."
Noteworthy fresh hedges in 2006 included the conclusion of Bema Gold's project related hedge at Kupol in Russia; an increase in the volume of purchased puts at KGHM Polska Mied#378;; and Boliden's extension of its hedge program connected with the expansion at Aitik, one of Europe's largest copper mines.
Implied net investment was down 17% to 64.5 million ounces last year.
Due to a lack of publicly-available data on activity in silver OTC products, GFMS was unable to provide a meaningful estimate of the impact of OTC activity on the physical market.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 05/23/2007 18:20:38 |
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SmallCHange
Penny Sorter Member
USA
70 Posts |
Posted - 05/24/2007 : 08:51:52
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LME Nickel Warehouse Stocks Level seems to be rising somewhat recently.
Look at the 30 or 60 Day chart.
Still at very low levels of course, but it could be indication something
is up.
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Could mean nothing as well.
I am still hoarding the 0.99 Canadians, but for those that might want to sell some, it might be time. Keep your eyes/ears open for any news and please post if you find something, as there seems to be alot of nickel hoarders on this board who would likely be interested.
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 05/24/2007 : 18:13:28
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silver junior news (AKA nickel)
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Nickel Falls on Speculation Demand May Slow; Copper Declines
By Brett Foley
May 23 (Bloomberg) -- Nickel fell for a second day in London on speculation rising stockpiles signal slowing usage as producers seek alternatives to the metal in stainless-steel manufacturing. Copper also dropped.
Nickel inventories monitored by the London Metal Exchange rose 1,446 metric tons, or 27 percent, to 6,834 tons, the exchange said today in a daily report, the biggest one-day gain since Sept. 11, 2003. ThyssenKrupp AG, the world's biggest stainless steelmaker, said yesterday that it may increase production of nickel-free stainless steel to reduce costs.
``Rising stockpiles have spooked people today because consumption has unambiguously slowed and we are starting to see demand destruction,'' David Thurtell, a London-based metals analyst with BNP Paribas, said today in a phone interview.
Nickel for delivery in three months on the LME dropped $1,050, or 2.2 percent, to $47,150 a metric ton as of 1:14 p.m. local time. The metal is the biggest gainer on the LME this year, rising 42 percent.
South Korea's Posco has said it will reduce nickel usage this year due to rising prices while Finland-based Outokumpu Oyj said last month that it will cut its stainless-steel output by about 10 percent in the second quarter because orders from customers have slowed.
Nickel has more than doubled in the past 12 months as China overtook Japan to become the world's largest user because of its expanding stainless-steel industry. About two-thirds of nickel is used to produce stainless steel.
In response to the price increase, China is expanding production of so-called nickel pig iron, a cheaper alternative to refined nickel, using ore from the Philippines and New Caledonia, Thurtell said. Its increasing use will probably cause demand to decline further, he added.
Copper Imports
The price of nickel may drop to $40,000 a ton in the coming month if LME inventories continue to increase, John Reade, a London-based analyst at UBS AG, said in an interview today.
Copper slipped $33, or 0.5 percent, to $7,173 a ton on the LME. Copper futures for July delivery fell 2.65 cents, or 0.8 percent, to $3.276 a pound on the Comex division of the New York Mercantile Exchange as of 8:15 a.m. local time.
Rising copper prices have ``triggered a buyers' strike in China and surplus metal has ended in Shanghai Futures Exchange- registered warehouses over the past three weeks,'' Reade said in a report today.
China's copper imports rose 61 percent to 1.1 million metric tons from January to April from a year earlier. SFE stockpiles are at their highest in three years, jumping 17 percent to 99,556 tons in the week to May 18.
LME-tracked copper inventories fell for a fourth day by 0.6 percent to 137,575 tons today. That's the lowest since Nov. 1.
Among other LME-traded metals, lead slid $30, or 1.4 percent, to $2,12 a ton after trading at a record $2,216 a ton yesterday. Aluminum dropped $25 to $2,830 a ton, zinc fell $15 to $3,695 and tin lost $150 to $13,800.
...(Reminder, we paid face for our coins, we lose 'paper profits' if the prices of copper and nickel decline. Just like stocks, commodites have their up dyas and their down days.)
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Nickel views...
"LME 3-month nickel's recent pullback likely only a correction in an uptrend, prices should remain near $50,000/ton in 2007 as LME stocks remain extremely tight," says Fortis' director of metals Gerry Schubert. "We would expect prices to be moving quite volatile with a forecast around $50,000."
Notes high prices accelerating substitution, but prices in immediate term shouldn't be affected; with visible stocks on LME at low levels, investor buying strong, prices can regain recent losses quickly. "All you need is one afternoon of fund buying and we're back at $52,000." LME 3-month nickel last at $46,000/ton, down $100 on London PM kerb." (comment - pick your own poison - lot of disagreement from the analyst's about what is going to happen here)...
Charles Bradford, a metals and mining analyst in New York with Bradford Research/Soleil, expects demand for the metal to ease as manufacturers find ways to curtail its use. While widely used in stainless steel, nickel isn't the component that gives the metal its sought-after corrosion resistance. Rather, nickel is used to make stainless steel look better and more pliable." While we understand the point Mr Bradford is trying to make, his quote, as given, is very misleading. Chromium is the ingredient that makes stainless steel corrosion resistant, but nickel plays an important sole/support role.
Even the much talked about 200 series stainless steel requires nickel. Even the much talked about 200 series stainless steel requires nickel. Here is an interesting article that explains the different elements making up stainless steel, and what role each plays - "Alloying Elements in Stainless Steel and other Chromium-Containing Alloys"
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and where nickel is used can be found in "Nickel - For a Sustainable Future" by Stephen Barnett
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Hunan Loudi a nickel smelting furnace explosion injured 10 people - "May 23, medical staff in the rescue smelting furnace explosion injured personnel. 13 pm the same day, Hunan Loudi City Howard Chong Holdings Ltd. nickel smelting furnace explosion, 10 people were injured." -
(We all hope the injuries were not life threatening)...
Lundin sees metals staying strong, nickel to star - "Lundin Mining Corp. takes a bullish view of base metals prices and sees nickel as the star performer amid delays in new supply and rising global demand, its vice chairman said on Wednesday."
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Gold, Silver Fall on Reduced Demand for Dollar Alternative
By Pham-Duy Nguyen
May 24 (Bloomberg) -- Gold fell to a two-month low in New York as a gain in the value of the dollar reduced demand for the precious metal as an alternative investment. Silver also dropped.
Investment in the StreetTracks Gold Trust, an exchange- traded fund backed by bullion, has fallen 6.3 percent to 469 metric tons from a record on April 17. Before today, gold had gained 3.9 percent this year as the euro climbed 1.9 percent against the dollar.
``Gold is precariously hanging on,'' said Ron Goodis, futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``The dollar is in reasonable condition. The fund managers aren't too eager to jump into this market.''
Gold futures for June delivery fell $9.30, or 1.4 percent, to $653.30 an ounce on the Comex division of the New York Mercantile Exchange, the lowest closing price since March 15. It was the biggest percentage drop since May 16.
Silver for July delivery fell 18.5 cents, or 1.4 percent, to $12.92 an ounce on Comex. Before today, the metal had climbed 1.2 percent this year. In 2006, the price gained 46 percent, while gold climbed 23 percent.
The euro has fallen 1.6 percent since April 27, when it reached a record $1.3681 against the dollar. Gold climbed to an 11-month high of $698 on April 20. The price has fallen about 6.1 percent since then.
Home Sales
The dollar rose today after a report showed purchases of new homes in April exceeded economists' forecasts. Stronger U.S. home sales may buoy speculation the Federal Reserve will raise interest rates this year. The Fed has kept its benchmark rate unchanged at 5.25 percent since June while the European Central Bank has raised rates three times since August to 3.75 percent.
``With rates potentially moving higher, that can be a problem for metals across the board,'' said Goodis of Equidex.
Gold reached a 26-year high of $732 on May 12, 2006. The metal's failure to climb above last year's highs as the euro hit a record sparked selling from hedge funds, analysts said. Five of the past six bear markets for the U.S. currency have led to a higher gold price.
``Gold seems to be struggling and the technical picture has weakened in the past couple of weeks,'' said William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. ``A lack of alternative asset demand for gold has been a negative.''
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Single ETF captures 13% of world silver output
By Saskia Scholtes in New York
Published: May 23 2007 21:04 | Last updated: May 23 2007 21:04
A single exchange-traded fund captured more than 13 per cent of the world’s silver output last year, according to data from GFMS, a precious metals consultancy.
It achieved this feat even though it was launched only in April last year.
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The launch of the iShares Silver Trust ETF, which gives retail investors easy access to the silver market through shares that trade on an exchange, helped stoke demand for the metal last year, sending average prices rocketing 58 per cent to a 26-year high.
Launched with just 1.5m ounces of silver in trust, the fund held 120m ounces at the end of last year and now holds more than 135m ounces. Global silver supply amounted to 912m ounces last year, according to the 2007 world silver survey released by GFMS on Wednesday.
The data show the increasingly important role that ETFs are playing in the precious metals world.
The world’s gold ETFs, which number about 10, have more than 20m ounces under management, accounting for a little less than a fifth of global gold supply last year.
Philip Klapwijk, chairman of GFMS, said the launch of the silver ETF raised concerns about its potential impact on the relatively small silver market. “There were fears voiced that it could lead to market disruptions,” he said.
As a result, investors bought silver before the product’s launch in anticipation of higher prices, and market participants borrowed silver to avoid the higher lease rates the ETF was expected to produce.
There was an initial spike in volatility as speculators unwound their positions and investors moved into the new fund. But Mr Klapwijk said that prices were now more stable.
In the past two months, a number of silver ETFs have launched. ETF Securities launched funds listed on the London Stock Exchange, Deutsche Börse and Euronext while Zürcher Kantonalbank started a silver ETF on the SWX Swiss Exchange.
Mr Klapwijk said the new ETFs were likely to help sustain high prices, particularly in the light of a slight contraction in overall silver supply in 2006
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 05/24/2007 18:35:09 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 05/25/2007 : 17:57:55
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Stop the presses!
Read this!
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Kiernan suggests Chinese fiscal decisions back gold boom
Michael Kiernan of Monarch Gold Mining has told a Perth conference that he believes China has the target of moving 20 percent of its foreign reserves into gold.
Michael Kiernan, Monarch Gold Mining's Executive Chairman, considers that China's decision to increasingly move its overseas foreign reserves to gold from multiple currencies and less reliance on the US dollar, will see unprecedented demand for the metal in the next two decades. Addressing the second day of the 2007 Paydirt Australian Gold Conference in Perth, Kiernan said he believed that although China did not publicize its intentions, it had set a target of having 20% of its foreign reserves in gold.
"This has to be put in context as only 1.2% of China's official reserves are currently represented by gold," Kiernan said. "Yet the country has overseas reserves totalling $1.3 trillion. You only have to do the sums to see what impact that will have on supply through converting 20% of that investment into gold to hedge against currency volatility."
Kiernan said China's current and planned foreign reserves position was in stark contrast to major industrial nations. He predicted a strong future for gold and a gold price hovering between $650/oz and $700/oz. However should his forecasts on China be correct one would expect a very considerable upside over this kind of level.
"The price outlook is solid as the supply of gold has basically been constant for the past 10 years or so, there have been sales from central banks and mine production has basically gravitated down in recent years.
"The annual demand for gold is around 4,000 t/y historically and while jewellery has temporarily fallen off, net sales have climbed as investment in gold hoarding has increased, particularly in India. China will ensure the supply demand gap widens as that country's gold purchases rose to 270 t in 2006 and its 1.3 billion consumers are spending more on gold jewellery than ever before."
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 - 05/25/2007 : 18:32:23
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More metals news...
Silver junior news
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Nickel price seen rising over 50,000 usd/ton soon; China demand strong - Numis
BEIJING (XFN-ASIA) - Nickel prices look likely to exceed 50,000 usd per ton in the coming days or weeks on strong global stainless steel production, particularly in China, with nickel supply struggling to match consumption, Numis Securities said.
Global prices for nickel surged last week as inventory levels fell to near all-time low levels.
Inventory levels have since recovered as new metal has come to the LME (London Metal Exchange) attracted by higher LME price levels.
The nickel market has substantially less liquidity than copper or aluminium, giving it the potential for greater volatility, the note added.
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CVRD-Inco says Voisey's Bay nickel mill restarted
TORONTO (Reuters) - CVRD-Inco (VALE5.SA: Quote) (RIO.N: Quote) said on Friday that mill employees at its Voisey's Bay nickel mine site have returned to work, ending a two-day work stoppage sparked by an incident involving a replacement worker.
"We've been able to restart the mill," said Bob Carter, spokesman for Voisey's, which was acquired last year by Companhia Vale do Rio Doce when it took over Canadian miner Inco.
Employees walked off the job on Tuesday after a replacement worker brought in by an outside contractor
sealed five mill employees into a container.
.....
"The safety concerns that had been expressed by our mill employees... have been resolved, and it resulted in them going to work last evening, which allowed us to restart," said Carter.
The replacement workers are filling in for striking employees of Torngait Services and Ush!tau Maintenance, which handle support services at the remote site, located in the eastern Canadian region of Labrador.
The company said the temporary stoppage would not affect concentrate shipments, which are to restart on Sunday following a routine six-week suspension.
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Copper Rebounds in New York After China's Inventories Drop
By Halia Pavliva
May 25 (Bloomberg) -- Copper in New York rose the most in two months after stockpiles in Shanghai dropped, signaling a pickup in Chinese demand and easing concern that the world's biggest consumer was oversupplied.
Inventories at five warehouses in the city fell 0.5 percent in the past week from a three-year high, the Shanghai Futures Exchange said today on its Web site. Stockpiles monitored by London Metal Exchange declined for a sixth daily session.
``The markets are enjoying a modest bounce in the wake of an unexpected fall in Chinese copper-stock figures,'' Edward Meir, an analyst at Man Financial in Darien, Connecticut, wrote in a report e-mailed today.
Copper futures for July delivery jumped 14 cents, or 4.4 percent, to $3.3205 a pound on the Comex division of the New York Mercantile Exchange, the biggest daily gain since March 15. Copper still ended the week down 0.1 percent, the third straight weekly decline.
Shanghai copper stockpiles fell by 529 metric tons to 99,027 tons, after reaching 99,556 tons a week ago, the highest since April 2004, exchange data show. The price of copper has slumped 12 percent since May 4 on speculation that Chinese demand may take time to absorb rising inventories.
Stockpiles monitored by the LME fell 1,975 tons, or 1.5 percent, to 134,125 tons, exchange data show.
On the London Metal Exchange, copper for delivery in three months rose $200, or 2.9 percent, to $7,200 a ton at 6:58 p.m. London time. The metal reached a record $8,800 last May.
Mining Disputes
``Also helping the upside mood are some Chile labor negotiations that seems to be getting more serious,'' Meir wrote in the report.
Codelco, the world's biggest copper producer, may face a strike next month from Chilean contractors' workers protesting for higher pay, a spokesman for the workers said.
A group representing the employees may begin protests June 9 unless Codelco and contracting companies move closer to granting their demands, said Cristian Cuevas, spokesman for the National Contractors' Workers Coordinator.
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Silver mine production costs fall and producer hedging turns negative
A view from London on the latest GFMS annual survey of the world silver market undertaken for The Silver Institute in the US.
In its latest annual survey of the silver market for the Silver Institute, independent analysts GFMS Ltd report that the weighted average production costs in 2006 at primary silver mines dropped to $2.74/ounce, down a hefty 51 cents or 16% from the average of $3.25/ounce in 2005.
The decline (compare with a 17% increase in gold mining costs) is attributable to the commodities boom as the value of secondary lead, gold, copper and zinc production has risen by 32%, 36%, 83% and 137% respectively. As a result of these high prices, costs of silver production at, for example, Greens Creek (Rio Tinto and Hecla), worked out at a negative $3.47/ounce; Morococha, however, takes the major plaudits with full year cash costs recorded at negative $3.71/ounce, a "greater than six dollar reduction year-on-year".
Primary silver mine supply contracted by 10% in 2006 against 2005,and accounted for 25% of gross silver mine supply.
In other words, the other 75% comes out of the ground as a by-product credit to copper, lead-zinc and/or gold, i.e. for nothing or at negative costs, as illustrated above.
....(the primary metal mined is copper, gold or lead and zinc, the silver is the by product metal that is dug along with the primary metal. i.e, silver is icing on the cake, profit wise, for mines.)
Furthermore the contribution to supply from industrial scrap return can arguably be regarded as price-inelastic and GFMS notes that with the exception of India last year, where there was some price-induced return during 2006, the market was far less sensitive to the price rally than it was in the gold market. Scrap return in 2006 was essentially the same level as in 2005 (a marked increase in India, offset by declines elsewhere, notably in Europe and North America). Similarly, net government sales are effectively price-inelastic.
What all this is leading to is the implication that, of some 912 million ounces of silver supply in 2006, just 18% is price-elastic.
Production from primary lead/zinc mines was once again the largest contributor to mine supply, accounting for 33% of total, while copper supplied 26%, primary silver, as noted above, 25% and gold, 13%. Other mines accounted for the 3% balance.
Meanwhile the delta-adjusted global producer hedge book contracted last year, falling by 7% or 6.8 million ounces, reducing the level to 82.0 million ounces. This is equivalent to five weeks' demand, while the reduction in the hedge book was the equivalent of less than half of one week's demand.
Output in Australia "plummeted" although this was offset by strong growth in the world's top three producers, Peru, Mexico and China, leaving global mine production at a record high of 646.1 million ounces. Australia's problems revolved around ground stability and metallurgical problems at the country's two largest mines. Output at BHP's Cannington mine in Queensland, which had been the world's largest producing mine in 2005, dropped by 16.2 million ounces because operations were idled at the property's southern zone during a period of rehabilitation that occupied much of the second half of the year. Australian output overall dropped by 28% to 55.6 million ounces, meaning that Australian production last year accounted for 9% of total, against 12% in 2005.
Peru was the world's largest producer, accounting for 17% of total, followed by Mexico (15%) and China (12%). These three countries, plus Australia, thus accounted for 53% of global mine production last year.
The change in the hedge book comes as something of a surprise given the high price of the metal last year and the high proportion of metal that is produced as a by-product. This is partly explained by the fact that a number of producers have been locking in prices through silver purchase agreements, rather than using the forward market, which is relatively illiquid. High price volatility was also something of a deterrent. Project financing was also less of a factor last year than previously.
The report describes the activity in the hedge market last year in some detail, including project financing from Bema at Kupol and Barrick's closure of the legacy hedge book from Placer, as well as defining the composition of the hedge book and outlining a number of silver purchase agreements from a group of leading silver producers. The composition of the hedge book was little changed year-on-year, with forwards accounting for 31%, net calls and net puts respectively accounting for 35% and 34% of the total. There is also an analysis of the price sensitivity of the delta-adjusted hedge book, outlining how the net call and net put positions change.
The study expects "robust" growth of approximately 3% in 2005 as fresh mine supply, particularly in South America and Mexico, more than offsets declining production at maturing mines, for example Eskay Creek, which is expected to close in 2008.
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Zimbabwe gold production decimated – now down to only eight tonnes a year
Zimbabwe’s gold output has plunged down to only 8 tonnes, the biggest fall recorded since 1916, the Zimbabwe Chamber of Mines said Tuesday.
In the 12 month period to March 2007, Zimbabwe's gold production was a meagre 8 tonnes. In the peak year of 1916, the country recorded production of 29 metric tons of gold and in a recent mini-peak in 1999 of 27 tonnes. Calendar 2006 output was around 16 tonnes.
Jack Murehwa, the chairman of the Zimbabwe Chamber of Mines, said Zimbabwe remains the only country yet to gain from the current high global mineral prices. "Our industry continues to experience declines in volumes despite the very buoyant mineral prices which have prevailed for the past 18 months," he said.
Murehwa said the world price of gold rose from about US$275 an ounce in 2001 to more than US$600 last year. He added that nickel, platinum and copper prices also rose significantly.
He bemoaned "policy inconsistencies" in the economy that have spurred hyperinflation, acute shortages of gasoline and hard currency for equipment and spare parts. Power outages and an exodus of most of the country's skilled mining personnel for greener pastures in other countries are the other reasons cited.
He said despite the high world prices, investors in mining were staying away from Zimbabwe.
The Reserve Bank of Zimbabwe has reported that foreign investment in the country declined from $444.3 million in 1998 to $50 million last year. The central bank cited "perceived risk" and worries over security of ownership as the main drivers of scepticism by investors.
President Robert Mugabe has in the past hinted that his government will claim about 50 percent local ownership of all mining concerns to further the country's black interests.
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News Bites - (courtesy Metals Insider) "China’s imports of refined nickel and alloy remained strong at 9,649t in April. comeulative imports over the first four months of this year were 39,208t, up 22% on the year-earlier period....There is also little doubt that the country’s new source of nickel - nickel pig iron made from imports of ore - is also seeing continued robust production growth. Imports of ore and concentrates - the country’s customs department does not provide a breakdown - hit a fresh monthly record of 1,593,772t in April. They totalled 3.849 million tonnes in the Jan-Apr period, compared with just 337,400t in the year earlier period. However, it is clear that despite super-high prices and a faster flow of nickel pig iron domestically China remains a significant importer of refined nickel" -
(courtesy Dow Jones Newswire) - "Trade buying and some short covering lifts LME nickel by 4% Friday, says a London-based broker. "There have been a lot of people who've been living probably hand to mouth," he says, in the context of recent high prices. "My guess is that it will be a rally supported by physical buys and some short covering," he says.
Adds base metals likely to trade in a sideways range over the next few weeks before moving downward again"
- Kommersant - "Norilsk shareholder and former CEO Mikhail Prokhorov, the only board member to vote against upping the bid for LionOre, thinks a deal on such terms is too risky for the Russian mining giant"
Roundup of Daily Pontifications - Pick your own poison …
1 View of the day: Jeremy Gray, Credit Suisse - "Nickel prices could continue to rally and even reach $65,000 a tonne this year, according to Jeremy Gray, head of the mining research team at Credit Suisse. That would represent a sharp jump from Wednesday’s nickel price of about $47,000 a tonne."
2 courtesy Dow Jones Newswire - "LME nickel likely to "continue its fall from grace," albeit at slower pace, says Standard Bank; rising LME stock levels, though from critical levels, weighing on sentiment despite temporary shutdown at CVRD's Voisey Bay nickel mine."
3 courtesy Dow Jones Newswire - ""Nickel prices look likely to exceed 50,000 usd per ton in the coming days or weeks on strong global stainless steel production, particularly in China, with nickel supply struggling to match consumption, Numis Securities said."
4 courtesy Dow Jones Newswire - "LME nickel is looking vulnerable to a further decline after the market's slump Thursday, with pressure coming mainly from system-based selling triggered by the breach of key technical support levels, a London broker says" and "LME aluminum, nickel likely to test lower if copper fails to regain strength, as technical charts encouraging trend traders to offload positions, says Hong Kong-based trader."
…4 analysts, 4 different opinions, just throw a dart at a dartboard guys, if it hits high, then nickel goes high, of low then predict low nickel prices, (or am I giving away a much guarded trade secret of analysts the world over?)
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On Nightly Business Report
Mark Leibovit of vrtrader.com predicted gold at $3,000 per ounce. While this would be fantastic for owners of gold, I always feel concerned whenever I hear such predictions, fearing that such predictions will jinx it somehow...
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 - 05/28/2007 : 19:04:19
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Zimbabwe miners bend law to survive
By Alec Russell in Bulawayo
Published: May 18 2007 17:27 | Last updated: May 18 2007 17:36
“Doing business in Zimbabwe?” The gold-mine owner laughed as he drew to a halt before a police checkpoint, one of the many that now enclose the country’s mining areas. “We have to work like drug dealers.”
He broke off his account to charm his way past the police. Then he was through and into the gold-mining area north of Bulawayo, a honeycomb of hills and tiny opencast mines where a lawless spirit increasingly prevails – reminiscent of the Congo under the kleptocratic rule of its late dictator Mobutu Sese Seko.
As Zimbabwe’s economy implodes, it is hard enough to do business in the towns where, every day, chief executives have to make critical decisions at a moment’s notice as they grapple with the galloping, four-digit inflation and the predatory ruling elite.
One CEO says he survives – just – by adjusting his prices twice a day. Deals are done with cash up front. He pays his staff twice a month and lets them rush out as soon as they get their wages so they can spend it all on food at that day’s prices.
“We’re hanging on the fabric of everything perceived to be normal,” he said. “But there will come a time when it will be simply impossible for a formal economy to continue any longer and there will be a reversion to a street business economy.”
In the gold-mining sector, which traditionally accounts for a third of Zimbabwe’s gross domestic product, doing business is even trickier, as President Robert Mugabe’s regime strives to take ever-closer control of the country’s main foreign currency earner.
In the past few months, the mine owner who compared himself to a drug dealer has been arrested – as have many of his miners and other mine owners – often on patently ridiculous pretexts, including not having a payslip on their person.
One manager was arrested for not updating his books on Christmas Day and Boxing Day. “You just pay, pay, pay,” said the mine owner.
The only way his operation has survived is by ignoring the regulation that all gold has to be sold to a subsidiary of the Reserve Bank of Zimbabwe. Until last month, the bank paid between 5 and 10 per cent of the gold’s value and then sold it on at the official world price. A month ago, the bank effectively devalued the Zimbabwean dollar by more than 90 per cent and increased the price it would pay for gold. But even so, the official price is way below the black market’s.
So the mine owner sells most of his gold illegally. To keep the police off his back, he plies them with liquor and pays to comply with a range of flowery new regulations, including the demand for an “environmental impact assessment” which is being enforced with extraordinary rigour.
“When I started mining a decade ago, I banked all my gold,” he said. “Now I bank just a fraction. What else can we do? We massage our figures in case of an audit. We manoeuvre and we watch as officials do what they want.”
A month ago, Gideon Gono, the governor of the Reserve Bank, said Zimbabwe was losing between $40m and $50m (€30m-€37m, £20m-£25m) [b[a week[/b] through the smuggling of gold, diamonds and other precious materials. He did not say who was under suspicion, but diplomats, the opposition and mine owners believe that officials of the ruling Zanu-PF party and within government are behind most of the smuggling.
Zimbabwean gold mining has never been for the faint-hearted. Under Ian Smith, who led Rhodesia into its ruinous civil war, miners – and officials – played fast and loose with the rules as they tried to dodge international sanctions, smuggling out precious minerals to earn foreign currency.
But in recent months, the industry has come under unprecedented strain. With the economy in freefall, and the country unable to honour many debts, the government is increasingly desperate to acquire foreign currency.
Last November, it ordered a crackdown on the thousands of gold panners who have flocked to mining areas. With at least 50 per cent unemployment, the chance of finding a gram of gold is worth risking life and limb for.
“They come with a little bag, like a rucksack. Rock-climbers have nothing on these guys,” said the mine owner, gesturing at the rocky scrub surrounding his small mine.
All around were head-high mounds of rocks – the legacy of the panners’ endeavours. “I’ve seen a panner suspended by a single strand of barbed wire, 30 metres into a hole. Some have killed themselves falling down.”
The official aim of the crackdown was to protect the environment. Industry insiders, however, assume it was an attempt to take ever-closer control of the mines.
Almost 50,000 small-scale mines were closed down, according to the Chamber of Mines. The operation was enforced with the regime’s trademark brutality. “In our area, they locked up thousands of panners,” said the mine owner. He saw many under armed police guard – some being savagely beaten.
“I saw one field with hundreds, guarded by police with machineguns.”
”I did a little jig as I went past to cheer them up. They cheered and in a moment the batons were out and they were beaten. There was one guy under a tree who was pummeled beyond recognition.”
All the while, the industry moves to the brink of collapse. The government says mining contracted by 14 per cent last year. Gold production was down by 17 per cent in the first two months of this year, according to the Chamber of Mines.
It emerged recently that for the past six months, the Reserve Bank’s subsidiary has not been paying the miners for the gold they have handed over for official sales, although the bank says the money has now been paid. Many mines have had to close their production mills after running out of the foreign currency needed to import essential chemicals.
“You can’t win,” said one CEO, weary of dealing with officialdom. “And you can’t play by their rules. They apply them selectively.”
Another businessman compared the situation to a novel by Wilbur Smith – the writer whose trademark is adventures in corrupt African states. “But Wilbur Smith can’t sell here these days because the reality is so much more colourful than his fiction.”
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 - 05/31/2007 : 18:07:02
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Base metals - the funds dominate but the positive fundamentals remain in place
This is the conclusion from the latest Base Metals interim Review from GFMS Metals Consulting limited, the division of the GFMS group that handles the base metals.
Author: Rhona O'Connell
Posted: Thursday , 31 May 2007
LONDON -
GFMS Metals Consulting's latest interim review on base metals reports that the recent bout of fund-led profit taking has put the fundamentals into the background, as the technical picture worsened for a number of metals, leading to sizeable selling from momentum-based funds including the CTAs. The study covers the non-ferrous metals that are traded on the London Metal Exchange, plus cobalt, while there is a separate publication covering steel. This brief summary looks at the conclusions for aluminium, copper and nickel.
Despite the sell-off from the mid-May highs, most of the metals finished May fairly close to where they started the month and GFMS Base Metals Consul ting's base metals index stood, close to the end of the month, at 363.49 against 363.94 at the start of the month.
The report notes that with the exception of nickel there was no build in LME inventories in response to the backwardations that are in place and that even for nickel, the underlying level of inventories is so low that the increase in LME inventory (from a low of 4,446 tonnes on May 9 to 7,720 tonnes on May 30) was largely ignored. The group is of the view that the continued downtrend in inventories for the majority of the sector suggests that there is scope for price gains in June, but views for further out are mixed.
The review notes that most f the economic data during the month suggested more of the same - "rapid growth in the emerging markets, solid expansion in Europe and the potential for a recovery in the US". While noting sound underlying business confidence in Europe, the group comments also that the European car market remains weak, held back by poor conditions in the older EU member states while demand from the new entrants continues to expand d sharply.
The study is cautious with respect to the prospects for aluminium, noting that consolidated global primary aluminium production rose to three million tonnes in April, up by 12% from 2.69 million tonnes in April 2006, with year-to-date production up 27% to 11.78 million tonnes. Perhaps it is no surprise that China is the primary driver, while elsewhere there is steady growth in all producing regions with the exception of Africa. Demand in the US and Japan was down by 10% and 13% in the first quarter although European demand remains reasonably robust.
The copper sell-off is described as largely technical in nature with the more fundamentally-based funds staying on the sidelines, while the fact that the backwardation remains in place (currently $55/tonne back for cash-to-threes on a three month price of $7,255/tonne), highlighting both the tightened inventory position and, interestingly, the existence of a dominant long.
The group believes that the bulk of the weakness is now behind the copper market, although there is a measure of doubt as to whether China's performance is too good to last, as all the evidence points to the building of inventories within China so far this year.
Apparent demand in China has been estimated by the International Copper Study Group at 35% higher in the first two months of this year against January-February 2006, driving growth of 8.6% in consumption globally over the period. GFMS is of the view that the heightening premiums in the United States are a function of tightening supply rather than an indication of recovery in demand, noting that COMEX stocks are down to 27,400 tonnes.
The group takes the view that in the short term we could see new highs in the nickel price, but that cash prices will be hard to sustain over $50,000/tonne during the third quarter of the year. It describes the tug-of-war in the market, with demand weakening from the stainless steel sector, while there are increasing supplies from scrap and low-grade ferro-nickel. Utilisation rates at smelters are high, however, and labour disputes remain a feature of the market.
The report notes that recent independent estimates of an apparent deficit of 42,000 tonnes in the first quarter of this year (a 15% deficit) does not account for the surge in low-grade ferro-nickel output. There is an increasing trend among stainless steel producers to move towards ferritic grades and low nickel-content grades; in addition to this there is an increasing availability of stainless steel scrap.
While the report does not specifically call an outright top to the nickel market, it does rather look as if, all other things being equal, that is what it is implying.
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Brazil CVRD: Tight Nickel Market Could See Pressure From India
SAO PAULO -(Dow Jones)- The tight nickel market could see pressures increase further in the years ahead if India's burgeoning economy increases its use of the key stainless steelmaking ingredient, the chief financial officer of Brazilian miner Companhia Vale do Rio Doce (RIO), or CVRD, said Thursday.
"Pressure from India is not yet included in the price," Fabio Barbosa said. " Demand could be even more intense if India effectively grows its use of the metal."
Barbosa made the comments during a presentation to Sao Paulo's Association of Analysts and Capital Markets Investment Professionals, or Apimec-SP.
He said that demand has continued to rise as China, India and other developing markets increase their production of stainless steel, with few new nickel projects coming on line to ease the shortage.
"The gap between supply and demand is growing rapidly," Barbosa said.
The tight market has pushed nickel prices to historically high levels, with the three-month contract price on the London Metals Exchange peaking at a record $51,800 a metric ton on May 9.
CVRD forecasts that nickel prices will remain elevated in a range between $40, 000 and $45,000 a metric ton in 2008-09, unless the latent price pressures from India emerge, Barbosa said.
The imbalance between supply and demand should be maintained for several years, given that the current nickel projects under development won't be in operation until between 2009 and 2011, Barbosa said.
"Our expectations are very positive for the next few years - and decades," he said.
CVRD expects to produce 287,000 metric tons of nickel in 2007, up from pro- forma output of 251,000 tons in 2006. In October, the company completed its $ 17.6 billion purchase of Canadian nickel miner Inco.
Barbosa said the company so far is on target for a December 2008 completion of its much-troubled Goro project in the French territory of New Caledonia.
The Goro project is one of the world's largest nickel mines currently under development, with expected production capacity of 60,000 metric tons a year. Goro is seen as a key swing factor in the critically tight nickel market, as well as a key foothold for CVRD in its expansion in the Asia-Pacific region.
However, the mine has been beset with problems that have delayed its development amid rising costs. CVRD's final budget of $3.2 billion is up from initial expectations for development costs of $1.5 billion.
Commercial-scale production is expected to start in early 2009 and ramp up over an 18-month period to full capacity, Barbosa said.
"Our vision for this project is very positive because future expansion could come at much lower cost," he said, noting that development of Goro to its full potential could yield immense gains for the company. Goro has 120 million metric tons of nickel reserves.
CVRD's Onca Puma nickel project in Brazil's Para state is also scheduled for completion in the fourth quarter of 2008, Barbosa said. The $1.4 billion project is expected to start production in 2009, with output of 58,000 metric tons of nickel annually when it reaches full production.
According to Barbosa, CVRD plans to be the world's largest producer of nickel at a production of 500,000 metric tons a year by 2012.
Barbosa said that the company was unfazed by a recent surge in stainless steel alternatives, such as nickel-chromium pig iron or Posco's (PKX) nickel-less stainless steel. There is also increased use of stainless steel products relying on higher contents of manganese or molybdenum, the executive added.
"Demand is not waiting on supply," Barbosa said. "These products are helping our clients compensate for the absolute shortage of the raw material."
However, the use of 72% to 75% nickel in stainless steel remains the standard, he said.
"It doesn't threaten the structure of nickel use in stainless steel," Barbosa said. "What we are focused on is the promise to our clients to expand our production of nickel."
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Gold, Silver Futures Climb on Demand for Dollar Alternative
By Pham-Duy Nguyen
May 31 (Bloomberg) -- Gold rose in New York, and silver jumped the most in three months as a decline in the value of the dollar against the euro boosted the appeal of precious metals as alternative investments.
Gold generally moves in the opposite direction of the dollar, which dropped against the euro after a government report showed the U.S. economy grew last quarter at the weakest in more than four years. Gold has gained 4.5 percent this year as the euro climbed 1.9 percent against the dollar.
``The renewed weakness in the dollar could encourage some buying of gold overseas,'' said Stephen Platt, commodity analyst at Archer Financial Services Inc. in Chicago.
Gold futures for August delivery rose $7.40, or 1.1 percent, to $666.70 an ounce on the Comex division of the New York Mercantile Exchange. The metal still fell 2.5 percent in May, the second monthly loss this year.
Last quarter's gain in gross domestic product compares with a 1.3 percent pace reported last month and 2.5 percent in the final three months of last year, the Commerce Department said today in Washington.
Gold also gained as June futures expired today above $650, a bullish indicator for traders who study historical price charts, some analysts said. The contract rose to $698 on April 20 before dropping to a low of $651.50 on May 24. It closed at $661.
`Momentum' for Rebound
``On the bullish side of things, support held at $650, and there may be momentum for a bounce back to $680,'' said Tom Hartmann, a commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, California.
Still, investment in the StreetTracks Gold Trust, an exchange-traded fund backed by bullion, has fallen 29.7 metric tons, or 6 percent, to 463.6 metric tons in May.
Silver for July delivery rose 25 cents, or 1.9 percent, to $13.47 an ounce. The percentage gain was the biggest since Feb. 23. The metal has gained 4.1 percent this year. The price still dropped 0.7 percent this month.
``Silver is getting support from the industrial metals,'' Hartmann said. ``Copper has halted its decline.''
Silver, which has wider industrial applications than gold, sometimes moves in tandem with metals like copper.
Copper gained 2.8 percent today to the highest in more than a week. The metal is up 18 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 - 06/01/2007 : 18:35:19
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China Diversifying into Equities and into Gold?
Excerpt:
Last year the Chinese government decided to change its policy on the composition of its reserves to reflect the composition of its trading partners. This was an effort to hold currencies sufficient to cover 'rainy days' with these partners. But as reserves are at levels way above those needed for a 'rainy day', the Chinese government finds itself holding well over a $ trillion more than it needs and this amount is rising by $250 billion a year and sure to rise.
So what can they do with these 'excess' funds? They can't enter the foreign exchange market to sell the U.S.$ component of these reserves, as they would certainly hammer the value of the $ itself and probably start a run against it, so that's out.
Investment in Gold?
Will they invest in gold? We believe they will, but the sheer size of their reserves makes it impossible for them to go into the open market to buy gold, after all a tonne of gold only cost $20 million, 50 tonnes a $billion.
What will be easy for them to do is to buy gold for their reserves via the purchase of local production, now around 250 tonnes a year [a mere $5 billion], but this will be paid for with Yuan. The Chinese want to keep the surplus away from the Chinese economy and avoid increasing the inflationary printing of money, so they will be cautious when doing this.
Such caution will, of course, be tempered by a continuous expansion of the local money supply to accommodate the larger economy and its consequential demand for more money.
So the purchase of local gold is certainly on the table of choices in front of the Bank of China....
A more appropriate way to ensure that there is gold in China is to expand the size of the local Chinese gold market through the widening of the gold market and direct encouragement to the Chinese citizens to buy gold and we believe they want to do this. After all the holding of gold by its citizens, still leaves that gold within its reach.
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 Diamond-encrusted platinum skull for sale
(It is a copy of a skull, not a real skull, but still, pretty wierd)
A diamond-encrusted, platinum skull by artist Damien Hirst, thought to be the most expensive piece of contemporary art ever created, was unveiled in a London gallery on Friday with a price tag of $99m (£50m).
The White Cube gallery in Mason’s Yard, Mayfair, where the work goes on display to the public from Sunday, said a number of “seriously interested” buyers had already enquired after the piece.
The work, entitled “For the Love of God”, is a platinum cast of an 18th century human skull the artist bought from a taxidermy shop in Islington two years ago.
It has been covered entirely by 8,601 VVS (very very slightly included) to flawless pavé-set diamonds, all of which were ethically sourced, with the help of the Bond Street jewellers Bentley & Skinner.
Mr Hirst said his search for so many high-quality diamonds in such a short space of time affected the market. “The price went up as we bought them,” he said.
The cost of the raw materials to create the work amounted to £12m, which was split between Mr Hirst and his dealer, Jay Jopling.
The gallery is expecting thousands of people to come to see the work. They will be able to book free tickets online and will be confronted by the tightest security measures ever seen at a London art show.
The total weight of the diamonds is 1,106.18 carats, including an “internally flawless light fancy pink brilliant-cut diamond” weighing 52.4 carats, that Mr Hirst has named “The Skull Star Diamond”. It is mounted in the middle of the skull’s forehead.
The artist said the idea may have seemed “blingy or tacky”, but its execution had produced a work that was serene and calm. He said the skull represented “the maximum celebration you could make against death”.
The original skull has been examined by forensic experts, who believe it to have belonged to a European male who was 35 years old at the time of his death, and who was alive some time between 1720 and 1810. Teeth from the skull have been reset in the platinum cast.
“For the Love of God” is the highlight of Mr Hirst’s new show, “Beyond Belief”, which takes place at the White Cube gallery in Hoxton as well as its Mayfair venue.
Some people have more money than they know what to do with.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 06/01/2007 18:37:39 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/01/2007 : 19:15:52
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Some more normal news
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Gold Closes Higher For The Second Straight Day
(RTTNews) - After showing a strong upward move in the previous session, the price of gold moved further off its recent lows during trading on Friday. Gold for August delivery closed up $10.20 at $676.90 an ounce after ending Thursday's trading up more than $7 an ounce.
The continued increase by the price of gold came as traders continued to pick up the precious metal at reduced levels following recent weakness. With the increase, the price of gold moved well off the two-month closing low that it set on Wednesday.
The price increase also came on the heels of the release of some key economic data,
including reports showing stronger than expected May employment growth as well as a slowdown in the pace of core consumer price inflation.
While the employment data helped to ease some of the concerns about the strength of the economy, the report showing that core consumer price inflation fell back into the Federal Reserve's comfort zone led to continued optimism about the outlook for interest rates.
Other metal prices moved higher along with the price of gold, with the price of silver extending a recent strong upward move. Silver for July delivery closed up $0.27 at $13.74 an ounce, resulting in a 5.7 percent gain for the week.
Additionally, copper for July delivery closed up $0.0095 at $3.405 a pound, platinum for July delivery closed up $9.80 at $1,295.60 an ounce and palladium for September delivery closed up $4.20 at $377.45 an ounce.
Quote:
While the employment data helped to ease some of the concerns about the strength of the economy, the report showing that core consumer price inflation fell back into the Federal Reserve's comfort zone led to continued optimism about the outlook for interest rates.
(And how accurate is the CPI when it ignores the cost of food and fuel?)
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Silver-Filled Silicone Adhesive suits FC-BGA devices.
MIDLAND, Mich., May 8 -- To address the issue of overheating in advanced flip-chip, ball grid array (FC-BGA) devices, Dow Corning Electronics today unveiled its DOW CORNING(R) DA-6534 High-Performance Thermal Adhesive. This unique, one-part adhesive combines the proven reliability and flexibility of silicone-based chemistries
with a silver filler
to achieve high thermal conductivity and elasticity at high and low temperatures, providing long-term reliability for today's leading-edge semiconductor devices.
Achieving thermal resistance of 0.09 cm2 C/W at 24 microns the new adhesive has already been qualified for manufacturing by two major device makers.
Silicone-based adhesives act as bonding agents for numerous components throughout the microelectronics industry.
As semiconductor devices become more complex and circuitry shrinks, the heat generated from these devices increases significantly.
To effectively remove this heat, a high thermally conductive and adaptable thermal interface material (TIM) is needed to perform the dual role of bonding the chip into its package and transferring heat away from the chip toward an integrated heat sink.
TIM adhesives must strike a precise balance of physical properties to protect packaged chips from stresses caused by differences in the co-efficients of thermal expansion (CTE) among the chip,
package and heat sink.
With its novel silicone and silver-based formulation, Dow Corning's new adhesive surpasses the performance of traditional TIMs on the market today.
Other TIMs may require high thermal loading of more than 70 percent filler or use ceramic fillers, both of which can compromise adhesion and thermal reliability.
Alternatives such as epoxy-based adhesives offer substandard adhesion and a high modulus, which can lead to cracking or voids that degrade the performance of the packaged chip.
As a thixotropic material, DA-6534 offers good dispensability, and its bondline thickness (BLT) can be controlled through pressure and time. In addition, DA-6534 has been designed to be completely inert and not produce any byproducts, which it achieves through the hydrosilylation reaction of vinyl polymers and a hydrogen cross-linker.
Dow Corning is displaying its DA-6534 adhesive during SEMICON Singapore, May 8-10.
Dow Corning has a long history of leveraging the unique properties of silicones in thermally conductive formulations, starting with its DOW CORNING(R) 4 electrical insulating compound introduced in 1944 for cooling magnetos on World War II aircraft. Since then Dow Corning has introduced hundreds of thermally conductive encapsulants and adhesives for the global microelectronics industry.
(Don't ask me what that all meant, all I can figure out is Dow created a silicon/silver epoxy for computer chips.)
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New demand for gold from diesel engine pollution control catalysts
Author: Tessa Kruger
Posted: Thursday , 31 May 2007
JOHANNESBURG - A new demand stream for gold could be created if recently unveiled gold-containing catalysts are applied to control diesel vehicle pollution.
Dr Richard Holliday of the World Gold Council told Mineweb that if gold became a player in the autocatalyst market for precious metals, it could be a very useful new source of demand for the metal.
The likely loadings of gold on the catalyst or the range of applications it will be used in is not known yet. But annual demand for platinum group metals in car catalysts exceeding 250 tonnes a year is some indication.
Holland said the gold industry should see this first introduction of a gold-containing catalyst for use in diesel vehicle oxidation as an excellent opportunity to create a new demand stream for gold.
Nanostellar, described as a leader in nano-engineered catalyst materials, introduced gold as an oxidation catalyst in diesel emissions technology for the first time in April this year.
It announced a gold or tri-metal catalyst (platinum, palladium, gold) that enables manufacturers of light- and heavy-duty diesel engines to reduce harmful emissions up to 40% more than existing platinum-palladium catalysts at equal cost
Its first generation product, based on a platinum and palladium alloy, introduced in 2006, achieved a 25-30% higher performance than commercial pure platinum catalysts. And the second generation product, the gold containing catalyst, delivers a further 15-20% increase in performance.
Platinum is the most expensive component of the diesel oxidation catalysts required to meet the new, stringent emissions regulations for light-duty and heavy-duty diesel vehicles produced worldwide.
Therefore, producers of catalyst materials have introduced the use of palladium to partially replace the more expensive platinum. Now gold - about half the price of platinum - is being pioneered to further reduce the amount of platinum needed as well as the overall cost of catalysts.
The tri-metal formulation of gold, platinum and palladium in diesel catalysts allows the proportions of each metal to be adjusted to meet engine-specific performance targets and to stabilise the overall cost - despite fluctuations in the price of precious metals.
The catalyst does not only improve on the performance of mixed platinum and palladium catalysts, but can also be more easily tuned to the characteristics of a variety of diesel engines, according to Nanostellar.
Holland added that although car manufacturers are often conservative in changing from one technology to another, the potential of cost saving would certainly act as a major enticement.
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New market for silver could be worth $1.2B in electronics sector
Author: Dorothy Kosich
Posted: Wednesday , 30 May 2007
RENO, NV -A Virginia-based advanced materials analysis firm predicts that the market for silver conductive inks for the printable electronics will grow to US$1.2 billion by 2014.
In the report, "Silver powders and Inks for Printable Electronics: 2007-2014," industry analyst firm NanoMarkets said the electronics industry already consumes 109 million ounces of silver yearly in a market worth $1.4 billion based on silver prices over $13/oz.
However, because there are currently a limited number of functions that silver can serve in printed electronics (PE), all of the firms currently supplying silver conductive inks are pursuing one or more of a handful of product strategies.
These strategies include:
designing inks that meet the need of specific printing technology or application (Radio Frequency Identification - RFID tags);
lowering the cost of processing of silver inks used in conventional printing;
implementing the printing of very fine silver lines in some graphics applications;
mixing silver with other metals to change the functionality of silver inks while maintaining its high conductivity ability;
using nanoparticles as the basis for silver conductive inks;
and whether firms now manufacturing silver powders should also produce silver inks.
The report, which builds upon NanoMarkets' ongoing coverage of the printable electronics application and materials, discusses the strategies of leading suppliers and technology developers. These include Advanced Nano Products, Cabot, Cima NanoTech, Creative Materials, DuPont, Ferro, Five Star Technologies, Harima Chemical, NanoDynamics, NanoGram NanoMas, National Starch (Acheson and Xink), NovaCentrix, Parelec, PChem and Sun Chemical.
The highest-profile current application of silver inks is probably printing the antennas for RFID tags. Many traditional materials and specialty chemicals firms, such as DuPont, have been supplying silver inks to the traditional electronic materials industry for several years. However, the silver ink business from be moving from being a fairly specialist electronics materials business to be a key to the new industry of printed electronics, according to NanoMarkets.
"There are now a handful or so of smaller firms that now see a fast growth, venture capital-style business opportunity in silver inks," according to the report.
NanoMarkets noted that "there are likely to be numerous applications throughout the PE industry as it begins to grow. Indeed, silver links may be seldom mentioned but often used; their use being assume because of the excellent conductive properties of silver."
"Asia is playing a distinct role in the silver links business," NanoMarkets asserted. ‘The consumer electronics firms that serve as a substantial market for silver inks are mostly located in Asia."
"Chinese nanotech firms, in particular, have specifically targeted materials (rather than nano-device) opportunities and, as such may well see selling nanosilver links into the PE sector as an opportunity in the future."
NanoMarkets will be hosting a teleconference on Wednesday, June 13, to discuss its findings. For further information about the silver powders and inks report, go to You must be logged in to see this link. or You must be logged in to see this link.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/04/2007 : 18:14:30
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Super-Ferritic Stainless Steels Drive
Molybdenum Use in Nuclear, Other Power Plants
Corrosive Cooling Water, Copper Discharges
Demand Tubing Shift in Power, Desalination Plants
Substitution of sewage treated water or seawater and environmental concerns about discharges from copper-nickel tubing in power plant condensers could strongly impact the direction of copper, nickel and molybdenum prices.
Decreasing use of copper and nickel in some parts of the world could lead to surpluses in both metals. But this would not be the case for molybdenum, although some analysts have erroneously forecast a similar molybdenum surplus would materialize by 2010.
On the surface, we realize the logic behind such predictions. About 60 percent of molybdenum is mined as a byproduct of copper production. Nickel is often mentioned in the same breath as molybdenum, especially when both are required in hefty amounts for the super austenitics.
But, according to the International Stainless Steel Forum, the fastest growing type of stainless are those grades absent the nickel content, or with lesser nickel in the composition. According to the International Molybdenum Association (IMOA), 25 percent of all molybdenum consumption in 2005 was used for stainless steel applications. While the bull market in stainless steel should continue past 2010, nickel could be left behind.
...Chinese economic growth has driven nickel prices past what many consider stratospheric levels. This is because China’s ten-plus-percent GDP growth consumed about 18 percent of the world’s 2006 nickel production. Between 2002 and 2005, China alone accounted for nearly the entire increase in world nickel consumption.
Soaring prices have forced ThyssenKrupp AG, the world’s largest stainless steel manufacturer, to reduce the company’s use of nickel. Further cuts are being contemplated. Finnish austenitic provider Outokumpu plans to increase production of ferritic stainless steels. Ferritic steels continue to use molybdenum, but are nickel-free.
According to experts we interviewed, the replacement of fresh water with accelerated use of highly corrosive treated wastewater and seawater will continue to drive the use of molybdenum in the tubing for many power plants worldwide and increasingly for tubing found in desalination and water recovery plants. The emergence of super-ferritics in power plants could add to far less nickel content but maintain as much as four percent molybdenum in power plant condenser tubes.
We talked with Dan Janikowski, general manager of Plymouth Tube Company, and Edward Blessman, technical director of Trent Tube, about recent developments in the power plant and water markets. Both are highly regarded in the tubing field. Blessman previously contributed to an article about molybdenum consumption in power plants for the IMOA; Janikowski’s name is found in the scientific literature for power plants and desalination.
Janikowski told StockInterview about the demand for super-ferritic stainless steel, “This year, at the pace we are going, we will sell more of this tubing than we’ve ever sold before. We are working at a record pace.” Plymouth supplies tubing to China, Japan, Mexico, Taiwan, India and other countries. “We were just awarded a contract a few days ago for tubing for a new nuclear plant in China, Qinshan #2,” Janikowski explained. His company will supply 700,000 feet of feed water tubing for the reactor.
Super-ferritic tubing is being used for all categories of power plants: coal, combined cycle, gas-fired and nuclear. One of Janikowski’s favored products is the UNS #S44660. The chemical composition of this super-ferritic includes up to 28 percent chromium, typically 3.7 percent molybdenum and about 1.5 percent nickel. The balance of the stainless steel includes trace elements and more than 60 percent iron.
While power plants, desalination and water recovery plants are primary end-users, the S44660 is no stranger to the petrochemical industry. Two major petroleum-related projects – both exceeding 1.2 million meters – chose this super-ferritic for cooling gas and/or crude utilizing sea or brackish waters: the PDVSA collection towers in Lake Maricaibo (Venezuela) and the U.S. government’s Strategic Petroleum Reserves.
This week, Janikowski meets with General Electric to supply tubing for nuclear power plants, which are being manufactured on behalf of Dominion and Entergy. We inquired as to how much molybdenum the reactors’ condensers would require. “Those are both 1600 MW plants so they’ll each require five million feet of (super-ferritic) tubing,” he told us. “That comes to 1.1 million pounds of tubing.” Janikowski calculated 0.22 pounds of molybdenum were used for each tube foot – about 41,000 pounds of molybdenum per reactor.
“These reactors will use thinner walls, about 0.5 millimeters in thickness,” Janikowski pointed out. Power plant condensers use one-inch diameter tubes which are 0.22 inches thick. Edward Blessman told StockInterview, “In the past year, orders have been for 1.25 inch outer diameter and 0.22 inches, but have been as high as 0.28 inches thick.”
Generally speaking, a larger coal-fired plant requires three million feet of condenser tubing which weigh about one million pounds. More than 35,000 pounds of molybdenum is used this tubing. Smaller coal-fired plants require about 7,000 pounds of molybdenum.
Business for extending the life of power plants is booming. “Two-thirds of our activity is in re-tubing existing plants,” Blessman told us. “Scarcity of water is driving the re-tubing.”
Running Out of Fresh Water
Although the United Nations has forecast that two-thirds of the planet’s population will be living with water stress by 2025, power plants have already begun suffering from a scarcity of fresh water as coolant.
New water rules in Nevada, New York, Missouri, Iowa and Arizona has forced power plants to use treated sewage water as cooling water.
Utilities can’t get fresh water to use in cooling their plants.
Blessman explained that secondary water, such as waste water, can have elevated levels of hydrogen sulfide, ammonia and chloride. These chemicals punish copper-nickel tubing. The highly corrosive water-environment has driven the replacement for super-ferritic stainless steel tubing. Janikowski and Blessman agreed this trend is expected to accelerate because of lessened water availability.
Nowhere is this scarcity more evident than in the Middle East. They both agreed this region has run out of fresh water and are using sea water or treated waste water in their district cooling and refrigeration.
So, we spoke with Otto Spork, who had been traveling in Europe. His office had informed us he had recently spent several months in the Middle East. Spork was featured on the cover of the June issue of Worth magazine with regards to the track record of his Toronto-based Sextant Strategic Opportunities Fund. According to the Globe & Mail rankings, his fund’s 117-percent returns over the past twelve months rated his fund as the best-performing Canadian fund for that period.
Spork confirmed there was no surplus fresh water left in Saudi Arabia, Bahrain or the United Arab Emirates. He explained, for example, “The Saudi’s aquifers dried up because they were mismanaged – trying to grow crops in the desert.”
He called the situation ‘desperate.” Spork told StockInterview, “People are using bottled water for drinking water and getting this from 25-gallon drums. The rest is desalinated water, which they are using for showering and laundry, as well as industrial uses.” Spork has been traveling through the Middle East and Europe as part of the due diligence efforts for his recently launched Strategic Global Water Fund.
Spork believes the region is primed for nuclear desalination. “Those areas have the money,” he told us. “Water needs energy and energy needs water.” Both Blessman and Janikowski had doubts about nuclear desalination because of cheap and abundant gas reserves found in the Middle East.
However, Gene Clark wrote in the April 2007 issue of The Nuclear Review, “The technology of coupling nuclear energy and desalination plants has already been applied in Japan and Kazakhstan, where commercial facilities have been operating since the 1970s.” Kazakhstan has abundant natural resources in both the petroleum and uranium sectors. Clark wrote that market demand for the large scale deployment of nuclear desalination would more likely be utilized ‘in countries where water and energy needs are most serious.’
.....Copper Discharge Limits
Why have copper-nickel tubes for power plant condensers (and some other uses) fallen into disfavor?
“Copper-nickel isn’t totally out of use, but the high cost and copper release issues have cut into the amount used,” Blessman told us. "My personal estimate is these are less than 20 percent of the power condenser market these days.”
Janikowski agrees, “We know of only one new power plant sited or built in the past ten years in North America using copper-nickel tubing. All of the other new plants have chosen stainless steel or titanium. Some existing power plants are still re-tubing with copper-based tubing but this percentage is dropping.” Because of the high price of titanium and nine-month (or longer) lead times, stainless is outpacing titanium by four to one for such tubing.
Concerns about copper discharges into surrounding water have led to regulatory changes. The inner linings of copper-alloyed tubes are eroded through the recirculation of seawater, brackish water or secondary water, such as treated waste water.
Janikowski told us, “Condensers weighing 800 thousand pounds at installation weigh about one-half as much because of all the copper discharges over time.”
These discharges can eventually pose a danger and/or downtime during the power plant’s operation. In a paper Janikowski presented at an industry workshop in 2003, he wrote, “The copper can replate on turbine blades, resulting in loss of efficiency, or on boiler tubes, resulting in premature failures. In some North American regions, high discharge levels have prevented the reuse of copper alloys in power plant heat exchangers.”
.....Regulations in some states have changed of copper discharges from power plants, as a result. Blessman explained, “Federal limits are one parts per million, which is very easy to meet with copper alloy tubes.” But he added, “Localized limits, mostly state driven, could be much more stringent.” Blessman pointed to the 12 parts per billion (ppb) discharge limits recently issued for new permits at three NIPSCo (Northern Indiana Public Service) coal-fired plants which discharge into Lake Michigan. He told us this was reported at the Champaign Electric Utility Chemistry workshop last month. “I know of another plant here in Wisconsin with 45 ppb limits.
And alarm bells about copper discharges are sounding off elsewhere. Last month, a report issued by the Guangdong Provincial Oceanic and Fishery Administration announced that nearly 8.3 billion tons of sewage poured into coastal waters off this south China province last year. An estimated 1.26 million tons of chemicals were reported in this sewage -much of this waste included copper. As a result, fish stocks are said to be experiencing degradation in terms of quality and variety.
Industrial wastes discharged into the Nairobi (Kenya, Africa) River Basin, including copper discharge, have been called ‘death traps flowing with poison.’ Nine rivers flow through the city of three million but fresh water is scarce. Some of this comes from copper and discharges are now heavily fined.
According to the U.S. Environmental Protection Agency, high levels of copper can lead to gastrointestinal distress. Long-term exposure can reportedly lead to liver or kidney damage.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/04/2007 : 18:19:20
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DJ Copper The Pick of Base Metals in '08; Lead In '07 -Macquarie
DowJones
SINGAPORE, Jun 04, 2007 (Dow Jones Commodities News via Comtex)
-- Macquarie Research foresees higher prices for copper in coming years
as mine output is unlikely to increase as quickly as previously thought and global demand, led by China, will remain robust, it said in a report Monday.
The Australia-based research group picked copper as the base metal of 2008, and forecasts an average price of $7,000 per metric ton for 2007, up 22% from its previous estimate, rising to an average price of $7,165 in 2008 before steadily declining until 2011.
"We have become increasingly bullish about the copper outlook for the 2008-2011 period due to the pushing back of projects we had previously included in our base-case forecasts and because of increased uncertainty about the timing of others," Macquarie said.
Macquarie expects demand in the U.S. to recover from its sluggish pace toward the end of the year, although it now believes U.S. copper demand will not be as strong over the next five years.
It raised its demand growth rates for China and other emerging countries, which it believes should limit inventories from rising above four weeks of consumption before 2011.
Macquarie said it expects lead and zinc prices to remain underpinned in the short-term by their low inventory levels, before easing in 2008.
It increased its 2007 forecast for lead by 20% to $1,936/ton, and more than doubled its supply deficit estimate to 70,000 tons. However, since temporary supply problems at lead mines such as Magellan Metals and Xstrata PLC's (XTA.LN) Mount Isa mine in Australia have been the leading drivers behind lead's high prices this year, Macquarie expects prices to ease to $1,433/ton by 2008.
The group raised its 2007 price forecast for zinc by 5% to $3,950/ton. Macquarie expects prices to ease afterwards, owing to new projects in South America coming on stream between 2007 and 2009.
Macquarie is less bullish on nickel and aluminum in the next two years. It expects nickel prices to trend lower the rest of the year as the record high prices bite into demand from the stainless steel sector and continue to spur rapid growth in China's nickel pig iron output.
Nevertheless, stocks should remain extremely tight by historical standards, and prices in 2007 should average only slightly below current levels at $40,124/ton, before falling sharply to $29,211/ton in 2008.
Macquarie said aluminum prices will remain on their steady but unexciting sideways path from 2007 to 2011. While Chinese aluminum and aluminum products output will probably continue to rapidly expand, demand, especially Chinese, has been surprisingly strong, Macquarie said.
"We would not go so far as to say that we are turning bullish on aluminum, but we think that it will come under less downward pressure than we had previously believed, and we are forecasting a flat profile for prices for the next five years," it said.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/05/2007 : 17:13:10
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UPDATE 7-LME nickel dips, lead eases on more supply
LONDON, June 5 (Reuters) - London Metal Exchange lead fell on Tuesday after a partial force majeure was lifted in Britain and nickel prices came under pressure as inventories rose, analysts said.
London Metal Exchange nickel was down by 3.3 percent or $1,600 to $46,200 per tonne at the end of the day.
It touched a low of $46,050 earlier, with stocks in LME warehouses rising by some 6 percent, or 504 tonnes, to 8,460.
Lead shed $45 to $2,325 after falling 3 percent to $2,300 when Swiss-based Xstrata Plc said it would lift the partial force majeure at its Northfleet refinery.
"We informed our customers last Friday that Northfleet will be back to 100 percent on July 1," the firm said.
The company declared partial force majeure at the lead refinery in early February owing to problems at its Mount Isa operations in Australia, which supplies feed to the plant.
Three-months lead has gained some 15 percent over the past month and hit a record of $2,395 last week on concerns about delays in shipments from Ivernia's (IVW.TO: Quote, Profile , Research) Magellan mine from the Australian port of Esperance.
Standard Bank has raised its average lead cash price <MPB0> forecast for 2007 to $1,950 a tonne from $1,800 previously.
In nickel, substitution and production cutbacks are seen with POSCO the world's third-largest steel maker, focusing on no-nickel stainless steel products as record nickel prices squeeze profit margins.
"Some of it (the rise in stocks) is due to people destocking in the face of very high nickel prices and some of it is due to a little bit of substitution," analyst Andrew Keen at Sanford C. Bernstein said.
Nickel has gained some 40 percent this year, hitting $51,800 on May 9 on strong demand from the stainless steel sector, accounting for two-thirds of all nickel output.
On Tuesday, Citigroup raised its long-term price view on nickel by 50 percent to $6 per lb, and upgraded miner BHP Billiton.
BHP shares rose on the upgrade, and at 1533 GMT were up 1.67 percent at 12.81 pounds per share in contrast to a FTSE index .FTSE that was down 0.47 percent. Other European bourses also slipped as inflation fears mounted.
Three-months aluminium <MAL3> slid $22 to $2,803.
The focus was on the large option for June expiring tomorrow.
"The market is likely to remain watchful in case there is a last minute dash for the 17,200 lots of $2,900 strikes," William Adams at BaseMetals.com said in a report.
With the market almost $100 below that strike price, however, it was unlikely they would be exercised, Barclays Capital analysts said.
Three-months copper was at $7,540, down $85.
Copper has gained 20 percent this year but prices are 10 percent below the record high of $8,800 set in May last year.
In New York, copper for July delivery ended down 2.65 cents to $3.4415 a lb on the New York Mercantile Exchange's COMEX division, after dealing between $3.42 and $3.50.
LME copper stocks fell by 600 tonnes to 123,300 tonnes on Tuesday, the lowest since late October 2006 and down by some 40 percent since the beginning of February. Shanghai stocks fell by 4 percent to 95,254 tonnes last week.
The premium for cash metal over three-months copper in London has nearly doubled to $100 from $54 in mid-May, reflecting a tighter market.
Potential strikes in Mexico, where workers threatened to strike at nine mines and processing plants owned by Grupo Mexico, supported the market.
Traders also said a lack of progress in contract talks at Collahuasi in Chile were helping to underpin prices.
Tin was at $13,950/14,000 against its last quote of $13,975/14,000 and zinc <MZN3> shed $65 at $3,775.
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Gold Futures Fall on Bank Sales; Silver Advances
Gold in New York fell on speculation that central banks will increase bullion sales. Silver rose.
European central banks will probably sell all 500 metric tons of gold allowed under an agreement that goes through Sept. 26, UBS AG said in a report today. UBS previously forecast sales of 400 tons. Gold gained 1.5 percent on June 1, partly because the European Central Bank, one of the signatories of the accord, said it won't sell more gold until September.
``Central bank sales have been holding gold back,'' said Frank Lesh, a trader at FuturePath LLC in Chicago. ``What a better time for central banks to sell than on the rallies.''
Gold futures for August delivery fell $1.20, or 0.2 percent, to $675.10 an ounce on the Comex division of the New York Mercantile Exchange. The price earlier climbed as high as $678.80 and fell as low as $674.20.
Spain's central bank reduced its gold holdings to 9.9 million ounces in May, from 10.8 million ounces at the end of April, according to a statement on its Web site today. The ECB said two members of the Eurosystem sold gold worth 29 million euros ($39 million) last week.
``The market seems to be more fazed by central-bank selling than buying,'' said Robin Bhar, a UBS analyst in London. ``This could have a depressing influence on the price.''
Before today's announcements, signatories had sold about 290 metric tons of gold since September, according to the producer- funded World Gold Council.
Fed Outlook
Gold and silver opened higher after Federal Reserve Chairman Ben Bernanke suggested interest rates may not rise anytime soon, weakening the dollar against the euro.
Bernanke said tighter lending standards for mortgages will ``restrain'' housing demand longer than policy makers expected. The Fed has kept rates unchanged at 5.25 percent since June 2006.
``The dollar is down again and that's certainly going to be a good push for gold,'' said Lesh of FuturePath.
The euro reached a record $1.3681 against the dollar on April 27. The 13-nation currency traded as high as $1.3554 today.
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Rhodium sensor advances detection of biomolecules 5th June 2007
Scientists in the US have developed a multicomponent indicator displacement assay (MIDA) using a rhodium complex as a receptor which has advanced the process of detection and identification of biomolecules.
The technology, which has been developed at the Federal School of Lausanne (FSL), works through a similar means to an indicator displacement assay (IDA), in which an analyte molecule binds to a receptor and displaces an indicator molecule, consequently altering its appearance.
However, in MIDAs a range of receptor-indicator combinations are utilised, with the individually coloured bound and free molecules given rise to by each analyte resulting in an ultraviolet-visible spectrum.
Furthermore, the FSL team have incorporated three commercially available dyes into the process, through which the varying amount of dyes that analytes displace enable biologically interesting molecules to be identified.
Thus far the researchers have used the system to detect adenosine triphosphate, cyclic adenosine monophosphate and pyrophosphate in the same solution.
Kay Severin of the FSL told the Royal Society of Chemistry:"The assay is very easy to perform, it just requires mixing of commercially available substances and a low-tech analysis method, such as UV/Vis spectroscopy."
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Platinum-based therapy boosts lung cancer survival 4th June 2007
A new therapy used in conjunction with platinum-based treatments has helped to increase the survival rates of patients involved in a trial of the drug.
Poniard Pharmaceuticals has announced that the phase two trial of its picoplatin drug demonstrated a survival benefit in patients with recurrent small cell lung cancer (SCLC).
Welcoming the results of the latest round of tests on the therapy, John R Eckardt, a clinical trial investigator and medical oncologist at The Center for Cancer Care and Research in St Louis, said: "Picoplatin extended survival in patients with recurrent small cell lung cancer in this clinical trial and has the potential to be a safe and efficacious adjunct or alternative to topotecan, the only agent approved for this indication."
The tests have focused on patients who are refractory to treatment with first-line platinum-containing Chemotherapy and has delivered a median overall survival of 27 Weeks, compared to 17 to 22 weeks for patients receiving other second-line chemotherapy treatments.
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This will effect platinum demand since platinum goes into fuel cells...
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China 'needs more fuel cell cars' 5th June 2007
It has been claimed that China is in need of more fuel cell vehicles so as to significantly reduce pollution levels in the country's major cities.
Air quality in cities such as Shanghai is plummeting, largely due to the proliferation of new vehicles on the roads. As such a team of Chinese experts has called for more investment in fuel cell technology to deliver more environmentally-friendly vehicles onto the market.
The experts argue that introducing fuel cell vehicles now would be ideal because so few residents of the bigger cities actually own cars. As the number of residents owning their own cars is expected to increase significantly in the years ahead, introducing fuel cell vehicles now would mean more people taking them up in the near future.
It is understood that Chinese officials are now considering developing the infrastructure that would be needed to support a widescale development of fuel cell vehicles.
The move would result in China becoming a world leader in the fuel cell industry, reports the Detroit Free Press.
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India: Jindal expects its monthly nickel consumption to double after its new SS plant starts operation
India's largest stainless steel maker, Jindal Stainless Ltd., expects its monthly nickel consumption to double to more than 1,600 tons when a new plant starts operation in three years, a top company official said.
Jindal, which runs a 600,000 tpy plant at Hissar in northern Haryana state, is building a new factory in the eastern state of Orissa that will make 800,000 tons of stainless steel when it begins production in 2009/10.
"Our total nickel requirement now is about 800 to 900 tons per month," V.S. Jain, managing director of Jindal Stainless, told Reuters in an interview on Friday.
"When we produce another 800,000 tons of stainless steel, our nickel consumption would double," he said, adding the projection was based on its product mix remaining the same.
Nickel, whose prices have more than doubled to about $46,000 a ton in the past one year, is mostly used sparingly at 1-4 percent in stainless steel but the metal accounts for half the cost of all inputs.
India's nickel consumption is met through imports, which attracts a 2 percent duty. India does not produce the metal.
Two-thirds of nickel output is used to make stainless steel, and world demand from the industry is expected to grow 7.5 percent this year, industry says.
India's demand for stainless steel is growing at about 12-13 percent annually, Jain said, adding high prices have triggered a shift to low nickel content in stainless steel in products such as kitchenware.
"The prices have gone up very high. I believe it is unrealistic and so they must come down," Jain said.
Many global stainless steel makers were shifting a bulk of their manufacturing to 1-4 percent nickel content, he said.
More than 70 percent of Jindal's stainless steel production falls in the 1-4 percent nickel content, Jain said.
It also makes products with up to 8 percent nickel and some with no nickel. High nickel content steel is mostly used for making industrial appliances.
Jindal aims to eventually raise its total capacity to 2.5 million tons to feed India's fast-growing economy, but it has not set a time frame for the expansion that will include raising the capacity at its Hissar plant to 900,000 tons, Jain said.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/06/2007 : 20:09:50
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Excerpts:
Strong Chinese demand to underpin high nickel price - "Strong demand for nickel, particularly in China, will keep nickel prices at high levels, a miners conference heard Wednesday."
(Quoted from Forbes Magazine)
Last month we tipped you off to a possible problem at the nickel mine, Voisey's Bay, due to a delay in a shipment we noticed. The next day, the general media reported production had stopped due to a walkout by the production union over replacement workers being brought in to replace contractors, that had been on strike since the prior week. Nickel prices saw their biggest one day jump in a month. This disagreement was resolved quickly, and we thought we had scooped the majors on the news. In reality, it was just a stroke of luck on our part. While production resumed, the ore carrier, MV Umiak 1, scheduled to leave June 3rd, was rescheduled for June 7th, but is still showing delayed on the company website. We have now learned that the delay in shipment is not due to any production problems, but ice. While unusual this late in the year, much of the shipping lane is covered in Class 9 ice, making shipments from Voisey's Bay, impossible - here (so while Norilsk can't ship due to melting ice and the floods it is causing, Voisey's Bay can't ship due to unusually late ice. With two of the biggest nickel mines in the world unable to ship, and LME nickel inventories still growing, this could be very bearish, or very bullish, depending on which camp you choice)
ASEAN miners to see strong gains amid China's rising metal demand - Citigroup - "China's rapidly expanding economy will continue to fuel growth among mineral producers in Southeast Asia, with capital inflows into the region's mining sector seen hitting more than 800 bln usd by the end of this year from just 180 bln in 2001, according to Alexander Molyneux, head analyst for metals and mining at Citigroup Global Markets Asia Ltd."
Philippines Could Become Major Nickel Supplier To China-Indus - "The Philippines could become a significant nickel supplier to China in about five years, provided planned major nickel projects come to fruition, an industry analyst said Wednesday."
Inco Raises Reserves Estimate as Technology Extends Mine Life - "PT International Nickel Indonesia, the country's largest nickel miner, raised the estimate of its mineable reserves by a fifth as the use of newer technology has helped extend the life of its mine."
Citigroup worries about sharp correction in nickel price - "Citigroup’s equity research unit Tuesday expressed worry about a sharp correction in nickel prices, calling the supply demand situation “an accident waiting to happen.”
"ANALYSTS at Goldman Sachs JBWere have painted an optimistic picture for the future of copper, but the brokerage has warned of a contraction in nickel prices as the global supply of the commodity moves back into surplus."
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Copper Futures Fall in New York on Concern Rally Was Overdone
By Millie Munshi
Copper futures in New York fell the most in almost two weeks on speculation that the metal's recent rally was overdone.
The price of the metal gained 2.5 percent last week as global inventories declined. Copper still has fallen 11 percent since reaching an 11-month high on May 4 on speculation demand will ease in the U.S. and China, the world's two biggest consumers of the metal. Inventories monitored by the Shanghai Futures Exchange have more than tripled this year.
``The rally that we've seen recently was just a short-term move in a larger correction,'' said Eric Wittenauer, an industrial-metals analyst at A.G. Edwards & Sons Inc. in St. Louis. ``It's still unknown whether the Chinese will use all their inventory, and demand in the U.S. looks set to slow.''
Copper futures for July delivery fell 3.75 cents, or 1.1 percent, to $3.404 a pound on the Comex division of the New York Mercantile Exchange, the biggest one-day drop since May 24.
On the London Metal Exchange, copper for delivery in three months dropped $84, or 1.1 percent, to $7,460 a metric ton. The metal rose to a record $8,800 a ton in May 2006.
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DJ PRECIOUS METALS: NY Gold Dips Slightly; Remains Range-Bound
By Allen Sykora
Of DOW JONES NEWSWIRES
Gold futures finished marginally lower Wednesday in what some analysts described as range-bound trading, although others said recent central-bank actions and comments may have taken away some of the inflation concerns that otherwise might help prices.
August gold dipped 50 cents to $674.60 an ounce on the Comex division of the New York Mercantile Exchange. Shortly after it closed, the August contract at the Chicago Board of Trade was down 60 cents to $674.60.
Comex July silver fell 9.5 cents to $13.717. Shortly after it closed, CBOT July silver was down 8.3 cents to $13.733.
Paul McLeod, vice president of precious metals with Commerzbank, described the metals as roughly in the middle of a wide trading range.
"So we don't have the investor community on the buy side at the moment," he said. "So we're seeing some choppy, sideways trading."
This investment-type buying may not return to the market in earnest until the metals make another push higher, McLeod said. This is a light week for U.S. economic data, and there does appear to be one over-riding theme driving the price action at the moment, he said.
Other analysts suggested gold may have been pressured slightly due to ideas that central banks are curtailing inflation.
"The market is reacting to the (25-basis-point) European Central bank interest-rate hike, a move designed to curtail growth and reduce inflation expectations and pressures," said John Person, president of National Futures Advisory Service. "In addition, we seem to have a general commodity sell-off and the equity markets are a little troublesome, worrying some people."
Shortly after the Comex gold pits closed, the Dow industrials were down by roughly 150 points and the Continuous Commodity Index was 1.40 points lower.
Some liquidation was occurring after August gold rose from the high $650s recently to a nearly three-week high of $679.50 on Monday, Person said.
"It makes complete sense that if you're reducing your expectation for inflationary pressures due to actions by the central banks to raise rates and cool economic growth, perhaps now is the best time to take some money off the table," Person said.
With June the final month of the second quarter, some funds may be starting to liquidate holdings and moving into cash, he added.
George Gero, vice president with RBC Capital Markets Global Futures, also commented that the ECB rate hike and talk of higher interest rates elsewhere has drug down gold, since this is anti-inflationary. However, he said, the softer tone in equities lately may mean some money is moving from this market
back into gold.
Gero added that gold has been held back lately by selling from the Bank of Spain and other central banks.
Bart Melek commented that there could be ideas that the interest-rate differential between the U.S. and Europe may not be as great as once thought, as the market is starting to doubt U.S. rates will be cut after all. While the ECB raised rates Wednesday, but this was largely expected, and the dollar has
firmed anyway, said Melek.
He also attributed some of gold's weakness to a generally softer tone in commodities. While crude oil was modestly higher as gold was closing, gasoline futures were sharply lower following a big build in weekly U.S. inventory data.
Meanwhile, July platinum settled with a gain of $1.30 to $1,300.10, while September palladium added $3.30 to $374.90.
Platinum has drawn some support from steps taken to initiate strikes in South Africa, said McLeod. A trader reported that the National Union of Mineworkers has begun speaking to lawyers to prepare the mandatory seven-day notice legally required for a work stoppage.
"You would expect that to be quite bullish," McLeod said. "However, we're into a bit of a quieter summer period on the (industrial) production side. The fundamental demand is a bit softer traditionally in June, July and August. So until the actual strike takes place and we get an impact on the supply
pipeline, these markets may be fairly quiet."
Palladium appears to be in an "ever-narrowing range" but may be setting itself up for a breakout, adds McLeod.
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Central Bank gold sales excitement!
The fact that the price has held up during this sharp increase in Central Bank sales is nothing short of remarkable and should highlight for even the market novice the underlying strength in the market.
Author: Neal Ryan
Posted: Wednesday , 06 Jun 2007
NEW ORLEANS (Blanchard & Co.) - If there really was ever any doubt about the tail (physical gold trading in London) wagging the dog (gold paper markets across the rest of the world), the recent excitement about all of the central bank activity in the gold market has again proven that indeed the gold market is moved by the actions of a few and it is paramount to keep an eye on that activity.
1.) The Bank of Spain updated May sales figures this morning and no surprise, Spain sold another 28 tonnes of gold in May after having sold 40 tonnes in March and another 40 tonnes in April. In three months and via an unannounced sales program, Spain has sold over 25% of its total gold reserves into the market. The interesting point to keep in mind is that this might not necessarily be being done to grab the best price...no, this "sales program" which has merited no public comment from the bank could be forecasting a much larger problem on the horizon in the fiat currency of Spain. While we are no expert on the Spanish economy, this fire sale of gold reserves looks much more like an attempt to raise quick cash to solve banking and housing issues rather than a program of diversification.
2.) The 133 tonnes in total sales over the past 3 months has not included the 37 tonnes in sales from the ECB umbrella organization as of yet. Looking at updated figures this morning showing less than 2 tonnes of sales last week by ECB captive banks, that 37 tonne figure has yet to show up in reports. So all told, the gold market in the last 3 months actually digested 170 tonnes of gold sales from ECB banks. We have no updated figures yet on banks outside of the ECB system because they report on a 3-6 month lag.
For a point of reference, even during the Bank of England and Bank of Switzerland gold purge from 1999-2004, no three-month tally during the CBGA has been as high as 170 tonnes of sales into the market. The fact that the price has held up during this sharp increase is nothing short of remarkable and should highlight for even the market novice the underlying strength in the market.
3.) UBS has put out a new research note this morning stating that they see ECB sales reaching the quota of 500 tonnes this year. This has been revised up from the 400 tonnes of sales they had been expecting. Our only thought is will this really matter anymore? The significantly increased sales in a short time period have kept the prices bottled up, but have not satiated demand in the market. If you can figure out what's affecting prices, then it's easy to pin point that during a period of increased bank sales, it is an opportunity to buy.
As has been proven
after every major set of bank sales in the last decade,
the price eventually goes higher after the sales are done.
4.) Now that ECB bank sales and other central bank gold activity has become the issue of the day (we're sure the market will move to something else tomorrow), we think it's time to start asking the hard questions about the gold loan and swap market again. This is the other side of central bank activity that no market analyst will touch with a ten foot pole because it's impossible to quantify and accurately track. If all the recent excitement about central bank sales activity isn't enough to get the average market participant interested in what's happening with the other gold in the central bank vaults, maybe nothing ever will.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/07/2007 : 18:25:01
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DJ PRECIOUS METALS: NY Gold Falls Amid Fund Selling; Stops Hit
By Allen Sykora
Of DOW JONES NEWSWIRES
Fund and chart-based selling sent gold and silver futures sharply lower Thursday, with weakness triggered in large part by a stronger U.S. dollar and the highest U.S. Treasury yields in 11 months, analysts said.
August gold fell $9.40 to $665.20 an ounce on the Comex division of the New York Mercantile Exchange. As pit trade was closing, the August contract at the Chicago Board of Trade was down $9.60 to $665.
Comex July silver fell 23.7 cents to $13.48. Shortly after it closed, CBOT July silver was down 24 cents to $13.479.
Gold started softer in response to a stronger dollar and recovered as crude oil moved higher by more than $1 a barrel. But as the euro extended its losses late in the session, the precious metals did likewise, with the move accelerating when technical selling was triggered, a trader reported.
The euro fell as far as $1.3422 from $1.3504 late Wednesday.
"We hit some stops," said the trader. "The euro is back down again and that seems to be the whole story."
Base metals were softer, resulting in some spillover elling. Also, higher Treasury yields hurt the metals, contacts said.
"There were a lot of sell stops," said George Gero, vice president with RBC Capital Markets Global Futures. The trader reported stops around $672.50, while Gero listed $670.
"A lot of it has to do with people just wanting out, because the higher market in Treasury yields is just frightening everyone," Gero said. "They are concerned that higher rates are going to make it much more expensive to hold the metal."
The 10-year Treasury yield climbed as high as 5.11%, a level last reached in July 2006. Currency analysts linked this to the dollar's gains.
With interest rates seemingly heading higher in many parts of the world, some participants are exiting so-called yen carry trades, Gero said. This is where market participants borrow money in Japan, where interest rates are low, and
invest in other markets, including gold.
"There are quite a few funds selling," Gero said.
This is occurring against a backdrop in which traders are mindful of some central bank selling in recent months, particularly from the Bank of Spain, he added.
"Spooked by the specter of higher interest rates and equity liquidations, bullion unraveled in quick fashion, sending prices tumbling more than $10 per ounce," said Jon Nadler, analyst with Kitco Bullion Dealers.
A "generalized investor malaise" has become a feature in a number of markets, including gold, he said. "Stock markets in the U.S. were seen headed for a third day of triple-digit losses, as suddenly, risk appetite is on the wane,
precipitated by an atmosphere of rising interest rates."
Some of the normal buffers for gold, such as crude oil up by roughly $1 a barrel as the metal was closing, were ignored, Gero noted.
He reported that sell stops were hit in silver around the $13.50 area, although this market seemed to hold up better than gold, bottoming at $13.43.
There appeared to be fewer longs in silver than the gold, he explained, meaning less potential volume from stops.
Meanwhile, July platinum fell $4.60 to $1,295.50 an ounce after initially spiking higher to $1,320, its strongest level since May 22.
"Volume dries up there and it turns around on a dime," said one trader. "It got pushed above $1,300, but didn't have enough juice to stay above. As soon as the buying stopped, there was a $20 downtick."
The initial buying appeared to be largely speculative in nature, he said.
Another trader commented that fund buying initially propelled the metal higher, with buy stops hit. Then funds were sellers as platinum backed off, he said.
"It was a big-time speculative whipsaw," he continued. "They triggered some stops on the way up, then everybody just bailed."
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Gold, Silver Fall as Higher Interest Rates Pare Metal Demand
By Choy Leng Yeong
June 7 (Bloomberg) -- Gold and silver fell the most in at least two weeks in New York on speculation that higher global interest rates will reduce demand for precious metals as alternative investments.
Bond yields climbed around the world after the Reserve Bank of New Zealand unexpectedly raised rates today. The European Central Bank yesterday raised a benchmark rate to the highest in six years. Holding gold becomes less attractive when rates rise because the metal has no fixed returns.
``As interest rates go higher and higher, it makes the purchase of any commodities, which never pay interest or have yield, a poor judgment,'' said Leonard Kaplan, president of Prospector Asset Management, a money-management company in Evanston, Illinois.
Gold futures for August delivery fell $9.40, or 1.4 percent, to $665.20 an ounce on the Comex division of the New York Mercantile Exchange, the biggest decline for a most-active contract since May 24. The price is still up 4.3 percent this year.
Silver for July delivery fell 23.7 cents, or 1.7 percent, to $13.48 an ounce on the Comex, the biggest drop since May 16. In 2006, silver gained 46 percent, while gold climbed 23 percent.
Gains were limited by speculation that Newcrest Mining Ltd., Australia's largest gold miner, will buy gold to close its forward sales contracts.
Exit Hedges
Newcrest is ``looking'' at closing its gold hedge book, Chief Executive Officer Ian Smith said today.
Most producers increased forward sales when gold touched a 20-year low in 1999 to hedge against further declines in the price. Mining companies have been unwinding those contracts to take advantage of prices that have more than doubled over the past five years.
Closing the hedge book ``provides buying pressure'' in the gold market, Kaplan said.
Newcrest has about 700,000 ounces of gold, or 38 percent of annual production, hedged each year for the next 5 1/2 years, Smith said.
Gold earlier climbed as high as $678 today on speculation rising energy costs will boost the precious metal as a hedge against inflation.
Some investors buy gold to preserve purchasing power in times of accelerating inflation. Gold futures surged to a record $873 in 1980, when a jump in the cost of oil led to a 13 percent annual rise in U.S. consumer prices.
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Gold may touch $1000: JP Morgan
Bloomberg / Mumbai June 08, 2007
Gold may rise to more than $1,000 an ounce as demand from India, China and exchange traded funds increases and production of precious metal falls, according to JP Morgan Chase & Co., the third-largest US bank.
Gold, which has risen 5.2 per cent this year, may reach $850 an ounce in the “medium term,’’ on the way to $1,000, analysts from JP Morgan led by John Bridges said in the report dated June 6.
They didn’t specify what the medium term was.
Gold-mining companies reduced output to a 10-year low of 2,471 metric tons in 2006, according to London-based researcher GFMS Ltd. Demand for gold from India, the world’s largest buyer, rose 50 percent in the first quarter of 2007 while demand in China gained 31 percent, according to the World Gold Council.
“We would continue accomeulating gold and silver positions looking to higher prices by year-end,’’ the analysts said. “A four-figure gold price looks quite feasible to us given the tight supply demand situation in the gold market.’’
Gold for immediate delivery fell as much as $1.30, or 0.2 percent, to $669.45 an ounce and traded at $670 at 11:56 am Sydney time. Silver for immediate delivery fell 1 cent to $13.69 an ounce.
Demand from this year’s Indian wedding season, the Chinese year of the ‘Golden Pig,’ and purchases by exchange traded funds may boost prices, the analysts led by Bridges said in the report.
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Gold demand rises
Strong economic growth in China, the Middle East, and India has resulted in demand for gold rising 31% from last year, the World Gold Council (WGC) said on Thursday.
"This 31% increase is due to consumer demand in China, India, and the Middle East for gold coins and gold jewellery. These driving factors already in force have most analysts forecasting higher gold prices," according to Lear Financial - a major US gold coin company.
"India is the now the world's largest gold consumer", reports Kevin DeMeritt, gold investment advisor at Lear Financial.
"Gold investors should keep a keen eye on India's gold buying patterns and perceptions regarding the future price of gold," he said.
India's strong economic growth and the traditional wedding season played a role in the rising demand for gold, but a more important factor was the Indian consumer's acceptance of prices above $650/oz, reported Lear Financial.
In China, the "Year of the Golden Pig" had a strong impact on an already robust growth has consumers flocked to buy gold jewellery and commemorative "lucky balls", particularly around Chinese New Year. Consumer demand in the first quarter of this year was 31% higher in tonnage terms than a year earlier.
"The increasing volatility in the Middle East over the last few months has caused Saudi princes to shift from the stock market to purchasing large blocks of gold and gold bullion since early October," the WGC noted.
Lear Financial research indicates global demand for gold reached US17.4 billion in Q1 2007, more than double the level of four years earlier and 22% higher, in dollar terms, than in the first quarter of 2006.
In tonnage terms total demand was 4% higher than Q1 2006. Jewellery demand was 17% higher in tonnage terms than the weak Q1 2006 and 38% higher in dollar terms.
"Demand from China and India in both oil and gold, combined with tensions in the Middle East have some analysts predicting higher price trends for both commodities. Investor analysts are indeed pleased to see that after an almost year-long hiatus, the Asian (India in particular) gold jewellery demand has once again become robust," the WGC said.
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Armed robber steals gold bars worth US$500K
TORONTO (CP) - Sierra Minerals Inc. (TSX:SIM) says an armed robber stole three bars of gold worth about US$502,000 from a secured room at its Cerro Colorado Gold Mine in Sonora, Mexico.
The company said the roughly 750 oz of gold, which represents about 14 days worth of production, were taken Wednesday hours before an armoured truck was due to arrive to transport the bars to a U.S. based refinery.
No staff were injured in the robbery and there was no labour disruption, the company said in a statement Wednesday.
"This is the first time since the inception of mining operations at Cerro Colorado in 2004 that an incidence of armed robbery has occurred," Sierra said in a statement.
Sierra said it's taking steps to tighten security at the mine and prevent a repeat robbery.
The robbery was captured on security video and Sierra says that footage is being reviewed internally and will be submitted to federal police.
Sierra added that its board is looking for a U.S. firm to do a safety audit and recommend security enhancements. It is considering expanded insurance coverage.
Sierra is a gold producer with one producing mine in Mexico, and an interest in the development of other precious metal exploration and production assets in Mexico and elsewhere in the Americas.
Prior to the announcement, the company's shares closed up 1.45 per cent to 34.5 cents on the Toronto Stock Exchange.
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Gold output falls 8.2%
GOLD output fell 8,2% in volume terms while overall minerals production increased 0,6% in April compared with the same month the previous year, official data showed today.
Production of non-gold minerals rose by 2,1% in April, Statistics SA added.
In March, year-on-year gold sales fell 4,7% to R3,41bn, sales of non-gold minerals decreased by 2% to R15,71bn and total mineral sales lost 2,5% to R19,12bn, a statement said.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/07/2007 : 18:36:17
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Silver junior news...
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Inventories registered another gain last night, with Rotterdam gaining 66 tonnes, and Singapore gaining 156 tonnes, and shipping 24 tonnes out.
Supply is up, and demand appears to be falling, which is adding pressure on nickel.
Europe has entered its slow period for stainless steel production, when workers, depending on the country, take off weeks to a month at a time.
So is the decline in demand seasonably cyclical, or is pig iron or substitution making a quantified dent?
We would guess it's a little of all three. In the mean time, we stainless steel sellers and consumers, will just act like we do at the gas pump, when prices drop a dime overnight, after a quarter increase the week before - slightly relieved, yet still very frustrated.
Nickel falls after LME changes rules - "Nickel fell around five percent on Thursday after the London Metal Exchange changed lending rules to free up more metal, analysts said."
LME Nickel Lending Guidance May Pressure Prices - "The London Metal Exchange's amendment to the lending guidance for its nickel contract may continue to pressure the three-month nickel price in the short-term, analysts said Thursday."
China's Nonferrous Metals Trade Deficit Reaches $10.58B in First Four Months - "China's nonferrous metals trade deficit amounted to $10.577 billion in the first four months this year, surging 135.62% from the same period last year, according to a National Development and Reform Commission (NDRC) announcement yesterday."
Metals - Base metals weaken across the board as nickel price dips to 10-wk low - "Base metals weakened across the board in early afternoon trade, weighed down by nickel prices, which dropped to a 10-week low following the LME's implementation of new trading rules that will effectively make more metal available to the market."
"The French government has no intention of selling its stake in nickel and manganese mining firm Eramet (13175.FR), weekly magazine Challenges reported Wednesday."
"Imports of nonferrous metals in China jumped 76 percent year-on-year in the first four months of 2007, according to the nation's top economic planning agency." - "32% of Turkey’s exports in the first five months of 2007 were made by members of the General Secretariat of the Istanbul Mineral and Metals Exporters’ Association."
"MMC Norilsk Nickel, the world's biggest producer of nickel and palladium, plans to bring four mining and concentrating plants on stream in the Chita region between 2009 and 2015, a source on the regional industrial and natural resources committee told Interfax."
Stainless scrap price sags as mills snub nickel - "Stainless steel scrap prices have turned into a downward spiral due to mills production cuts and substitution, which may help bring down nickel prices from historic highs, industry officials said on Thursday. The traders said stainless steel mills in Europe and Asia were trying to delay or cut contracted shipment of scrap as they were reducing the use of nickel, which has doubled to around $50,000 a tonne in the past year."
China Baoshan to make more low-nickel stainless - "Baoshan Iron and Steel Co. Ltd. will raise production of low-nickel stainless steel to between 35 and 40 percent of its total production in 2007 versus 30 percent last year to reduce costs amid high nickel prices, a senior executive said on Thursday." -
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/08/2007 : 20:22:20
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Gold tumbles, as dollar rallies, crude oil falls
Silver, copper futures plunge 3%, energy futures also sell off
NEW YORK (MarketWatch) -- Gold futures tumbled in a broad commodities sell-off Friday, as the dollar rallied against other major currencies, damping investor appetite for metals.
Gold for August delivery closed down $14.90 at $650.30 an ounce on the New York Mercantile Exchange, marking a five-session losing streak. The contract has tumbled $26.60 this week.
"Gold sustained a further damaging blow on Friday, as price support after price support gave way in the wake of massive selling on the trading floors," said Jon Nadler, analyst at Kitco Bullion Dealers.
"Silver sustained heavy losses as well ... An ugly day, if we ever saw one," Nadler said.
Silver and copper futures plunged about 3%, while energy futures also fell across the board, with crude oil tumbling 3%. See Futures Movers.
"The firm U.S. dollar helped trigger the selling today," said Peter Spina, analyst at GoldSeek.com. "It appears a break of some technical supports aided the large fall in the metals today."
"Once the selling broke some supports, the selling accelerated and the momentum wave was just too strong for the market to see any meaningful reversal from the lows," Spina said.
The dollar rallied across the board early Friday, touching a two-month high against the euro. The Dollar Index, which tracks the greenback against the world's major currencies, rose to 82.92, its highest level since April 10.
..............(Why is it whenever there is a little bit of slightly good news for the US dollar everyone bails out of Precious Metals, completely ignoring the underlying problems the US dollar still has,
(huge deficits, rising inflation concealed by doctored CPI numbers, etc)
then these same investors pour money back in when the metals increase in price, losing out on profits they could have made if they just sat on the metals?
Part of the problem lies in how commodities contracts work.
Speculators buy these contracts with no intent of holding said contracts until maturity, but sell them when the price goes up. A commodity speculator who holds the contract too long ends up having to take posession of the metals and paying the balance of the contract (a contract can be bought on margin, for 10% or so of the total value)
It is the speculators that cause so the price of commodities to go up and down.
What would be illegal on the NYSE or NASDAQ is fully acceptable on the commodities exchanges. Ig nore the one day or one week of bad news for the Precious Metals, the summer is often a bad time for commodities and the stock market. Keep an eye on the prices but take it with a grain of salt.
(with so many things in life needing a grain of salt it is no wonder high blood pressure is running rampant in the US.)
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Copper Tumbles 3.5%; Slowing Economies May Damp Metals Demand
By Millie Munshi
June 8 (Bloomberg) -- Copper futures in New York tumbled 3.5 percent, the most in two weeks, on expectations that rising borrowing costs in major economies will slow growth and limit demand for metals.
Copper, which generally moves in tandem with economic expansion, has gained 13 percent this year. The U.S. Federal Reserve is unlikely to cut interest rates before 2008, according to a Bloomberg survey. Economists last month forecast a 25 basis-point cut in the fourth quarter. The European Central Bank, the Reserve Bank of New Zealand and South Africa's central bank raised interest rates this week.
``There are a lot of people around talking about how interest rates are going to skyrocket,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet LLC in Stamford, Connecticut. ``There's a panic in the market.''
Copper futures for July delivery dropped 11.95 cents to $3.2575 a pound on the Comex division of the New York Mercantile Exchange. The percentage decline was the biggest since May 24. Futures fell 4.3 percent this week.
The Fed will leave its benchmark overnight lending rate at 5.25 percent until the second quarter of 2008, according to the median forecast of 69 economists surveyed by Bloomberg from May 30 to June 7.
Interest rate increases may lead to a U.S. economic slowdown, Chidley said.
``We could be heading toward a recession, and that would be bad for the copper market, regardless of what happens with China,'' he said.
Demand From China
Demand from China, the world's biggest consumer of the metal, sent prices to an 11-month high on May 4 as imports surged in the four months ended April. The price of copper has fallen about 14 percent since then on concern the country may be oversupplied.
Last month, China increased its one-year benchmark rate to the highest in more than eight years.
The Bank of England, which left interest rates unchanged yesterday, is under pressure to clamp down on the U.K.'s worst bout of inflation in a decade. Gains in consumer prices have exceeded the bank's 2 percent target in the past year.
Some traders also were concerned that the U.S. is heading toward a period of so-called stagflation, with lower economic growth and higher inflation, Edward Meir, an analyst at Man Financial Inc. in Darien, Connecticut, said in a report. The U.S. is the world's second-largest copper consumer.
Inflation Concerns
``It seems the U.S. markets are all focused on an economic scenario last seen here in the late 1970s: stagflation,'' Meir said. ``It's all red on our screens today, as we seem to be seeing a repeat of February's meltdown.''
On Feb. 2, copper plunged 4.3 percent to a 10-month low on speculation that metals-trading hedge fund Red Kite Management Ltd. was posting losses.
Futures also fell on concern that China will slow copper purchases.
``Imports should moderate and a global surplus'' will become evident in the second half, Helen Henton, head of commodity research at Standard Charter Plc in London, said in a report yesterday.
China's imports in May might have dropped by the most in three years after inventories increased and prices soared, analysts said this week.
On the London Metal Exchange, copper for delivery in three months fell $290, or 3.9 percent, to $7,140 a metric ton ($3.24 a pound). The metal rose to a record $8,800 a ton in May 2006.
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China Saw Nickel Import and Zinc Export Hike in Jan-Apr - "China imported 39,200 tons of unwrought nickel and 3.8494 million tons of nickel ore from January to April, hiking 21.9% and ten times on 2006 respectively, with the export of unwrought nickel growing 19.1% to 7,900 tons."
China's Nonferrous Metal Trade Deficit Rose 136% in Jan-Apr - "China's deficit from nonferrous metal trading kept enlarging in the first four months of 2007, up to USD 10.577 billion, which is USD 6.088 billion or 135.62% more than that at the same period of 2006."
Cogne intends to expand Chinese stainless CR output - "Cogne Acciai Speciali, Italian stainless steel long products mill, is planning to double its cold rolling output at its stainless steel plant in Changan, China by 2009."
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As seen on DW TV
In Germany, the wheels on German trains are from time to time re-cut to insure maximum safety, though eventually enough metal is removed to render the wheels unsafe for use. This is no problem when replacement wheels are substituted for the old ones, but due to the high demand for stainelss steel (used in train wheels) there is now a shortage of steel wheels. Due to worldwide demand for steel, the German Train Compamies are having a hard time getting replacement train wheels since demand for all steel has gone up. German Trains have started running with two fewer cars than ususal, and the re-use of some steel wheels deemed too worn out for use may be pushed back into service.
As to how this would be done wasn't explained too clearly on the program, maybe the old wheels could be used for slower trains or could be melted down for new wheels or some other idea.
One more factoid as to how the cost of steel is effecting everyone.
In the US and Canada we never think about trains getting worn out or needing replacements, I guess that is one of the drawbacks to this modern jet age, we forget about the less romantic, ths slower but crucial method of transport of goods and materials, the trains.
If steel wheels do have to be replaced in US and Canadian trains, and with the prices going up, then it would make sense for the cost of shipping by train to go up too.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
Edited by - pencilvanian on 06/08/2007 20:40:03 |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 06/11/2007 : 18:26:03
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This is more of a personal view than news...
Near where I live there is a craft store that sells all kinds of crafting items, including items to make your own jewelry. The craft store carries sterling silver components (silver beads, thin silver chains, silver ear ring mounts,etc) for those who choose to make a better quality product than simply silver plate or faux silver items or their jewelry.
A few months ago the price for silver jewelry items was $2.99 each, now the price is $3.99 each.
It seems that the increased price of silver is beginning to be seen.
(Note, the sterling components sell for far more than their melt value, I bought a few of these items to find out how much they weighed. The sterling items weigh anywhere from 1.5 to 1.8 grams total weight, at $3.99 for each package of sterling beads/earrings/thin chain the price of silver would have to be above $82.00 per troy oz to make it worth buying this jewelry for melting. I bought the sterling items beacuse I thought it was interesting to own.)
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Silver junior (nickel) news
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News from China
Nearly 100 enterprises "misappropriation" patent laterite nickel mine development companies determined to safeguard their rights - "In the global nickel ore resources becoming less urgent situation, a breakthrough in low-grade nickel oxide ore comprehensive development and utilization of technological bottlenecks advent of the patent, is expected to break the international price of nickel rising year after year." -
Nonferrous metal prices will continue to rise - "Australia's commodity Bank Executive Director, Managing Director Jim farmers out : non-ferrous metal prices will continue to rise"
Of 23 Chinese metals analysts who responded to the weekly poll published by Shanghai NonFerrous Metals, 7 (30%) felt nickel prices would rise this week, with the other 16 (70%) forecasting prices to stay the same. None of those responding felt nickel would fall further this week.
Iron ore prices likely to fall - Merrill Lynch - "Reuters reported that Merrill Lynch World Mining Fund forecast that that iron ore prices are likely to fall but companies mining gold, platinum and uranium offer good value." -
Yet more China news
Sluggish stainless steel market in China last week - "The stainless steel market seems to be continuing sluggish in China due to the sharp fall of nickel future price on the LME last week, closing at US$42,900/MT last Thursday."
China’s stainless producers may cut production in June - "Many Chinese stainless steel mills are considering to reduce production in June due to slow-moving demand."
Stainless steel scrap market to slow - "Nickel price on the LME began to fall last week and this downward situation remains this week, therefore many suppliers are starting to offer lower price of stainless steel scrap."
China's iron ore output grows rapidly - "China's iron ore market has presented two trends at present: 1. Growth of iron ore import has dropped to a 4-year low; 2. Sharp increase in home-produced iron ore has curbed price hike of iron ore to certain extent."
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DJ BASE METALS: Comex Copper Futures Stage Strong Comeback
By Allen Sykora
Of DOW JONES NEWSWIRES
Another inventory decline, rebounding equities, technical considerations, labor uncertainty in Chile and an upward revision in Japanese economic growth were all cited as factors that helped copper rise sharply on Monday.
The most-active July copper contract gained 9.85 cents to settle at $3.3560 per pound on the Comex division of the New York Mercantile Exchange.
The metal recouped much of Friday's 11.95-cent loss that had been blamed on worries about recently higher Treasury yields, which backed off slightly Monday.
The further decline in London Metal Exchange warehouse inventories of copper supported prices, reported Dave Meger, senior metals analyst with Alaron Trading. A daily research report from Barclays noted that the 900-metric-ton
fall in LME stocks was the 16th straight day of net outflows, and the 120,550 total is the lowest since October.
"In addition, the overseas equities were a little firmer," Meger said. "That, along with a technical bounce, was a consideration for the move. And we had positive Commitments of Traders data."
The London FTSE 100 index advanced 0.7%, while the German DAX Xetra 30 Index gained 1.1% and the French CAC-40 index rose 0.8%.
Meger and Bill O'Neill, one of the principals with LOGIC Advisors, both commented that July copper appeared to find some chart support after falling back below the $3.30 area Friday. The futures bottomed that day at $3.2440, but got no weaker than $3.2720 overnight and were above $3.30 the entire open-outcry session on Monday.
"I continue to view the $3.20 to $3.30 area as support," said Meger. "Given the hard sell-off and stops hit below $3.30 (Friday) that achieved prices just below $3.25, we are seeing a nice bounce-back."
"Copper seems to have pretty good support once you get under $3.30 and around the $3.25 level," O'Neill added.
A sharp upward revision in first-quarter Japanese gross domestic product was also supportive for copper, O'Neill said.
"That was a very significant upward revision to 3.3% from 2.4% on an annualized basis," O'Neill said. "It really indicates that we have a situation where we have very strong European and Asian growth in general, and the U.S. about to rebound. That enabled the market to move higher today."
He also cited spillover buying from gold's recovery from weakness late last week.
The weekly late-Friday Commitments of Traders data from the Commodity Futures Trading Commission was also constructive for copper, Meger said.
The funds - or large non-commercial accounts - trimmed their net short position in Comex copper in the week to last Tuesday for the first time in three weeks. They pared their net short position to 9,618 lots for futures and options combined, down from 11,571 the prior week. The bulk of the change was due to apparent short covering, as the number of total shorts fell by 1,268.
"That led one to believe you might see some higher prices from here on out,"
Meger said. "And, it looked like you had some fresh buying in the market. That is something the market takes as a positive sign."
The data showed that the number of total longs rose by 685.
A trader and a daily Triland Metals research report both described the market as subdued.
"With the macro backdrop much less threatening - (and) assets elsewhere seeing some bargain hunting - buyers surfaced in copper, too," said Triland.
"With sentiment also assisted by concern over potential labor problems at Codelco, the U.S. market then followed the LME's firmer price lead."
Going forward, O'Neill said, a key may be Treasury yields, analysts said.
Rising yields resulted in selling in most precious and base metals late last week as they drug down equities, and weaker stocks in turn tend to create worries about the economy and thus copper demand.
"That is something still to be watched," O'Neill said. "If the psychology of interest rates really starts to pressure global stocks, that would be a drag on copper. But at least for today, we have a little bit of a respite as far as that is concerned."
Copper could face some choppiness going forward, with the market also monitoring potential labor problems at Grupo Mexico and Codelco, O'Neill added.
"There could be some problems elsewhere as well," he said. "There is a little bit of labor unrest underpinning the market."
The most recent Comex inventory data, released late Friday afternoon, were down 343 short tons at 26,113 short tons.
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Chinese firm buys Vancouver-based Peru Copper for $840M
Vancouver-based Peru Copper announced Monday it has agreed to a $840-million takeover offer from Aluminum Corp. of China (Chinalco).
The all-cash offer is for $6.60 per share of Peru Copper, which represents a 21 per cent premium on the average price over the previous 20 days of trading.
On the TSX on Monday, shares of Peru Copper rose 11 cents to finish at $6.46.
Peru Copper's main asset is its Toromocho copper project, 140 kilometres east of Lima.
Surveys suggest it's one of the largest undeveloped copper deposits in the world.
"We are delighted that a company of the financial and technical strength of Chinalco is going to take the Toromocho Project to the next stage of its development," said Peru Copper chairman David Lowell.
Chinalco is the largest metals and mining company in China. Its biggest asset is a 40 per cent stake in Chalco, the largest producer of primary aluminum in China.
Directors and other shareholders owning 34 per cent of Peru Copper shares have agreed to tender to the Chinalco offer.
Peru Copper, which has been evaluating strategic alternatives for the company since November 2005, had announced on May 24 that it signed an "exclusivity agreement" with a third party on a possible sale.
But its shares fell just a few days later after it announced that the agreement had expired on May 28 with no deal being reached.
...(Looks like the Chinese found a use for their US Dollars, exchange fiat for metal.)
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Gold Rallies From 12-Week Low as Stocks, Oil Gain; Silver Rises
By Choy Leng Yeong
June 11 (Bloomberg) -- Gold rose from a 12-week low in New York on speculation that last week's slump was overdone because rising equity markets and higher energy costs will boost the metal's appeal as a hedge against inflation. Silver gained.
Gold's 3.9 percent decline last week was the biggest in three months, as the threat of higher interest rates led some investors to sell the metal to cover losses in the equity markets. U.S. stocks rebounded on June 8 after floor trading in gold ended and European stocks rose today.
``The rally in the equities and the metal stocks -- that helped gold itself to do better,'' said Marty McNeill, a trader at R.F. Lafferty & Co. in New York. ``Oil does have a positive influence on it.''
Gold futures for August delivery rose $7.70, or 1.2 percent, to $658 an ounce at 12:12 p.m. on the Comex division of the New York Mercantile Exchange. The price on June 8 touched $647.80, the lowest since March 16.
Silver for July delivery rose 22 cents, or 1.7 percent, to $13.26 an ounce. The metal plunged 3.3 percent on June 8, the biggest decline for a most-active contract since March 2. The price fell 5.1 percent last week.
Crude oil rose today after Saudi Aramco, the world's largest state oil company, said it would cut exports to Asian refiners for a ninth month in July.
``Although we may see some additional selling, I do believe the worst of the sell-off is behind us,'' Matthew Zeman, a trader at LaSalle Futures Group in Chicago, said on June 8. ``Gold may get some much needed support from crude oil.''
Rate Increases
Gold fell last week after the Reserve Bank of New Zealand and the European Central Bank raised rates. Holding gold becomes less attractive when interest rates rise because the metal has no fixed returns.
``I think the interest-rate paranoia has been overdone and see gold rallying modestly next week,'' William O'Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said on June 8. ``However, to maintain any lasting strength, the metal needs to see a return of significant alternative asset demand and it may be a few months before that occurs.''
Before the sell-off in the past two sessions, Hedge-fund managers and other large speculators increased their net-long position in gold futures for the week through June 5, ending a two-week decline, according to U.S. Commodity Futures Trading Commission data.
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Indian farmers may lose healthy appetite for gold
Author: Tessa Kruger
Posted: Monday , 11 Jun 2007
JOHANNESBURG -
A considerable source of investment-related demand for gold could disappear as millions of Indian farmers move to cities or join industrialisation in India.
The Fortis/VM Group said in a recent Yellow Book article a great gold market driver to watch in the short and longer term, is whether India's rural poor continue to invest in gold during times of stress and transition, or if they will secure their income in alternative ways.
The Indian rural poor still account for two thirds of annual gold purchases in the country, despite its emerging middle class.
But millions of Indian farmers are expected to move to urban centres over the long-term as they seek greater wealth and their farms disappear in the midst of industrialisation.
The Indian government is looking at policies to move India's 200m subsistence farmers into manufacturing to address their exposure to unsustainable land practices and to ensure that rural populations contribute to India's extraordinary economic growth.
Small scale farming in the country is also under threat from the vast debt burdens of small farmers - a symptom of a wider breakdown in agriculture due to a decline of public investment in agriculture, among other factors.
This anticipated shift away from small-scale farming into larger-scale agricultural development and increasing urbanisation could have a considerable impact on India's gold demand.
Small-scale farmers have traditionally used spare cash to invest in small pieces of jewellery, as they favour gold above paper assets in times of economic and political uncertainty.
But gold - as the most esteemed medium of exchange for the country's rural communities - will come under increasing pressure as India's land use and tenancy changes over the next decade.
Significant amounts of small pieces of gold investment jewellery are likely to re-enter the market as farmers dispose thereof to fund a new start in larger towns and cities.
This trend would be influenced by factors such as the levels of government compensation for land, existing debt burdens and cost of relocation and the accuracy of titling of land deeds.
A counter possibility is that the loss of one measure of wealth in rural India, land, may lead to a concentration in the other, gold.
However, a lack of clarity on the rate and nature of savings in India does complicate the picture. Household savings and the number of banks have increased and physical gold ownership plays a slightly different savings role as a result.
A third possibility is that these farmers "make it" in an urban environment and start demanding gold for adornment as they fully participate in India's booming economy.
"Although it is clear that middle class Indians will increasingly have a number of luxury items to choose to spend their money on, gold is likely to remain a high priority."
Changes in gold demand will depend on whether India's rural poor will continue to invest in gold.
But if the move away from traditional patterns of employment and income for subsistence farmers reduce the tiny amounts currently available for investment, the possibility emerges that this source of investment-related demand for gold will stop.
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Gold and silver prices – where are we now in the cycle?
Author: Lawrence Williams
Posted: Monday , 11 Jun 2007
LONDON -
Any bull run in any commodity or stock index will include corrections from time to time, and when the upward price movement has been as strong as it has been for precious metals over the past three years there are bound to be occasional steep setbacks. Investors become disillusioned in the wake of nearly all the experts predicting breakouts upwards, and these not occurring, and the impetus behind the bull market stutters. Downturns, often accelerated by external factors like the recent Spanish gold sales, create technical sales when computer programs call for stop loss intervention, and the professional investors and funds, which have bought low and sold high, walk off with tidy profits.
The individual investor then gets a little panicky (and with relatively new investment instruments like ETFs around there are probably more individual investors in the metals than ever before) and may also take profits, while the new ones who may have bought high, bail out again for stop loss reasons.
Those who hold their nerve will wait with bated breath to see if their investment will continue downwards, or recover, as many of the precious metals gurus insist.
The question is where are we in the cycle now? Personally I think there is no doubt that gold and silver prices will recover and test recent highs - and perhaps, as many experts suggest, move into the stratosphere - but the big quandary is whether it will fall back further first and should one sell and try and pick the next temporary bottom before the runup continues. Timing is of the essence and the investor who can pick the tops and the bottoms in a market correctly most of the time is well on the way to fortune. Unfortunately it's not that easy.
As Neal Ryan pointed out in his recent article here on gold supply, the fundamentals of supply and demand for gold - and although there may have been a recent short-lived breakout from the relationship, the silver price has been tracking that of gold pretty closely - are extremely positive. Mine supply is showing no significant increase, and may even be falling back a little, and this situation shows no signs of any change. Industrial demand is good and probably rising, while jewellery demand seems to have recovered as fabricators get used to generally higher price levels.
But, in the face of this fundamental strength, the downward pressures have nipped any breakout upwards of the $690 level in the bud and the metal price seems to be moving in a trading range of between $640 and $690. Any upwards movement seems to be countered almost immediately by downwards pressures which suggests, in the market's eyes at least, that perhaps overall the metal price may have moved too far too fast over the past three years and we may be seeing a hiatus period, and perhaps a further small fall, before the upward path is renewed.
Dollar weakness may well be the ultimate key here. Forget oil price movement except perhaps in the context of its effect on the US or World economies. Everything suggests further weakness in the US economy ahead in the short term, although the currency seems to be holding up reasonably well at the moment, which has been another dampening factor on the gold price.
So, perhaps the upward movement of the gold price has been faster than the greater market is happy with. But, as everyone seems to be pointing out, the fundamentals are strong for a continuation of the upward movement at some point, but whether this will happen in days, weeks or months remains to be seen. As is always the case, as an investor you are out on your own here. Timing is everything.
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DRD Gold extending Crown’s life with AngloGold Ashanti tailings dumps
Gold production from old South African mine tailings could start within 24 months.
Author: Tessa Kruger
Posted: Thursday , 07 Jun 2007
Excerpts
JOHANNESBURG -
DRD Gold is extending the life of its Crown Mines property in Johannesburg with gold tailings on the East Rand it has acquired- in a joint venture with Mintails from AngloGold Ashanti.
DRD spokesperson Ilja Graulich said today after the announcement that DRD and Mintails have formed a new joint venture (JV) that has bought gold-bearing tailings on the East Rand goldfields in South Africa, and that this extension of Crown's operations was important as the mine's life was limited to another six or seven years....He said the joint venture acquired the tailing dumps on the basis of historical production at Ergo - a surface reclamation operation surrounded by the dumps. Ergo processed more than 890m tonnes of tailings material and produced approximately 8.2m ounces of gold over 25 years before it was closed in 2004.
The JV would now start testing and drilling to establish the value of gold in the dumps that typically contain between 0.1 and 0.8grams per tonne, said Graulich.
Gold production could start within 24 months, but depended on the outcome of the feasibility study. The tailings had a broad footprint on the East Rand and the drilling would establish which dumps would be exploited.
He said tailing dumps came into being over a period of 5 to 40 years and the volume of gold contained here depended on the quality of metallurgical recovery at the adjacent mining operation.
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I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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Bullion news and views #2
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