Stainless Steel News and Nickel Prices, LME Nickel Price, Stainless Steel News – Molybdenum – World Metal Pricing and Market Conditions

Afternoon Nickel/Stainless Roundup

Official LME nickel closing prices – cash – $12.02/lb 3 month buyer – $12.18/lb (2.27% higher than 12/31/07) (chart)
Baltic Dry Index – minus 76 to 6,437. (chart)
LME nickel inventories – plus 360 tonnes into Rotterdam, Netherlands warehouse, minus 174 tonnes from Rotterdam warehouse, minus 18 tonnes from Singapore warehouse (comment – first large shipment in a few weeks comes on the day ‘after’ the BDI rises for the first time in a few weeks.)
It was a trading day of two halves. In the first half of the day, nickel took a steep decline. Then, after the US Fed announcement of an emergency funds rate cut of 75 basis points, to 3.5%, the market reversed itself, and spent the rest of the trading day in an equally steep climb. By the end of the day, the market had ended nearly where it started. For the day, three month nickel closed at $12.47/lb ($27,500/tonne). If today’s latter half rise holds tomorrow, then we can expect official prices to be higher tomorrow.
Closing Metals Report – more

Haywood Securities Metals & mining Weekly – pdf here

Copyright/courtesy Dow Jones – “The Federal Reserve, citing a weakening economic outlook, cut its target for the federal funds rate 75 basis points to 3.5%”……””It depends how the market digests the information,” said Barclays Capital analyst Gayle Berry, adding if the markets decide they point to worsening conditions in the U.S. then fears of a U.S. led slowdown will resume pulling the complex lower. A London-based trader said base metal investors are viewing the rate cut as bearish given its size and subsequent falls after the cut, which indicates the economic situation in the U.S. is worse than expected and further base metal price falls are therefore expected……Stability in US equity markets could be a sign that a bottom in base metals is not too far away, says UBS’ Robin Bhar. But says sentiment remains negative and fresh risk exposure is unlikely to be added to amid the current period of de-leveraging over fears of a US recession…..The commodities supercycle theories have been “shot in the foot” as the markets slide in line with equities, said JPMorgan analyst Jon Bergtheil. “The China story isn’t going away, but investors are now looking for a really good entry point,” Bergtheil said. Base metal demand “really is dependent on China,” said Standard Bank analyst Leon Westgate. He said signs China is “getting hurt” will affect the market. “The uncertainty right now is whether China can weather the storm,” Westgate said.”

The global slowdown in stainless steel demand triggered 4th quarter cutbacks in nickel-based steelmaking worldwide. Data from the International Stainless Steel Forum shows that stainless steel production in the first three quarters of 2007 of 20.9 million metric tons was just 0.4% higher than in the first nine months of 2006

Courtesy Dow Jones – “Jindal Stainless Ltd (JSL), the country’s largest stainless steel manufacturer, has reported a 55.24 per cent dip in the net profit for the third quarter ended December 2007”

AK Steel Holding Corp. said Tuesday it swung to a fourth-quarter profit from a year-ago loss which included a hefty one-time employee health care benefit charge. – more

Russian UC Rusal, the world’s largest aluminium and alumina producer, intends to buy a stake in Norilsk Nickel from shareholder Vladimir Potanin, after agreeing in December to purchase 25% plus one share in Norilsk from Mikhail Prokhorov. – more

Chinese nickel imports are expected to be flat in 2008, as a weaker global economy keeps nickel demand in check while nickel pig iron continues to provide stainless steel makers with an alternative raw material. – more

China’s refined lead exports fell 56.1 percent on an annual basis to 235,758 tons in 2007, while refined zinc exports dipped 15.2 percent year-on-year to 275,649 tons, and refined nickel and nickel alloy exports dropped 25.2 percent year-on-year to 16,930 tons, according to figures released by the General Customs Administration today. – more

Credit Suisse’s theoretical iron ore supply and demand model suggests that 2007 ended short by about 25 million tonnes when seaborne trade totaled about 790 million tonnes. – more

Universal Stainless & Alloy Products Inc. said Tuesday it expects weaker first-quarter profit because of continued volatility in nickel prices and limited production capacity. – more

According to the customs-statistics released in China, China exported 16,338 tons in total of molybdenum products in January – November of 2007, consisting of 8,342 tons in material of ferro-molybdenum and 7,996 tons in material of molybdenum oxide. – more

A federal magistrate is expected to decide this week on the procedures to be used in the Feb. 12 fairness hearing into a proposed $663 million settlement covering health-care benefits for nearly 4,900 AK Steel retirees and their families. – more

China’s state-backed miners have looked at Xstrata but are unlikely to bid for it, leaving Brazil’s Vale or Anglo-American best placed to snap up the Anglo-Swiss miner. – more

Courtesy AISI – “In the week ending January 19, 2008, domestic raw steel production was 2,084,000 net tons while the capability utilization rate was 87.4 percent. Production was 1,877,000 tons in the week ending January 19, 2007, while the capability utilization then was 78.2 percent. The current week production represents an 11.0 percent increase from the same period in the previous year. Production for the week ending January 19, 2008 is up 1.6 percent from the previous week ending January 12, 2008 when production was 2,050,000 tons and the rate of capability utilization was 85.9 percent.”

US Fed cuts prime by 75 basic points in emergency session – pdf here

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

Indications at 7:55 am CST show 3 month nickel selling down by $.27/lb. Metals are a mixed bag this morning, with precious metals up, and most base down.
Reuters – more

TD Bank Weekly Commodity Report – pdf here

Reliance Money Commodity Report – pdf here

Rand Merchant Bank Base MEtals Report – pdf here

Canada Commodity Update – pdf here

Thru November of 2007, China imported 5.63 million metric tonnes of chrome ore, compared to 4.035 million tonnes during the same period in 2006. The top 6 suppliers to China, in order of volume imported, are South Africa, Turkey, India, Iran, Philippines, and Pakistan. As of November 2007, China had imported 1,343,907 metric tonnes of ferrochrome. In November China imported 130,952 mt of high carbon ferrochrome, and 3,445 metric tonnes of low carbon ferrochrome, a 43.5% increase over October figures (93,634 mt).

South Africa Electrical Problems (comment – watch ferrochrome prices. This could drive prices even higher.)

Copyright/courtesy Business Day – “South Africa must cut its overall electricity consumption 20% as soon as possible to cope with a power shortage which has led to a spate of blackouts in the past week, a senior Eskom official has said. Ideally the cutbacks should be shared across all sectors of the economy – residential, business and industrial – as the utility expands its capacity, said Andrew Etzinger, Eskom’s GM for demand-side management……”There is no quick fix in sight, serious steps must be taken to address the situation,” he said. “For the next seven years SA is going to be short of power. How we deal with that needs to be answered urgently — in the next week or two.”
(excerpt) “Solidarity further said that they have been informed that Zimbabwe does not pay for the electricity supplied to it by Eskom – something that will not sit well with electricity starved South Africans.” – more
Zimbabweans had no electricity or water again this past weekend after nationwide power failures led to the complete shut down of basic services from Saturday evening until Sunday afternoon. – more (comment – Bindura Nickel Corp’s nickel mines production have already been affected by power outages throughout 2007, and with an annual production of around 7000 tonnes, it is doubtful this news will have much of an effect on nickel prices)
According to Mining Weekly, Eskom’s top 5 customers are mining companies BHP Billiton, Anglo American, Xstrata, Sasol, and Richards Bay Minerals.

Media reports out of Australia last week, claimed that China’s Baosteel had walked out of iron ore negotiations with BHP, Rio and Vale. Baosteel quickly denied the report, and since Baosteel is not leading negotiations for China, as it has in the past, we aren’t real sure what effect any walkout, if it had happened, would have really had on the negotiations. Chinese media reports this year China is being represented by Zhao Xiaogang, Chairman of Angang Steel and head of the China Iron & Steel Association. Steelmakers from Europe and Japan are also represented in the negotiations.

Blaming the paper market for sharp falls in the Baltic dry indices was “a bull***t theory” from those who do not understand how forward freight agreements worked, according to a shipping hedge fund manager, writes Jamie Dale. – more

The potential combination of Brazilian mining company Companhia Vale do Rio Doce, or Vale, and Anglo-Swiss mining group Xstrata PLC makes strategic sense, but Vale will face a challenge financing a possible deal. – more (quote – “A possible tie-up would allow Vale to achieve “critical mass” in coal and copper, Cliff said. Vale has been trying to increase exposure to the two key minerals, with plans to develop coal deposits in Australia and Mozambique and copper deposits in Brazil. The combined Vale-Xstrata also would be a heavyweight player in the key nickel market.”) (comment – would “be” a heavyweight player?? Both company’s are already heavyweight’s… combining the two would create “the” nickel heavyweight. Vale would not only become the world’s largest nickel producer, but also the world’s largest ferrochrome producer, world’s largest iron ore producer, world’s largest exporter of thermal coal, world’s largest exporter of iron blast furnace pellets, and no telling what else. Let us hope they don’t decide to produce stainless steel, because they will control nearly all of the ingredients. )

Russia’s United Company RUSAL, which is buying a strategic stake in metals major Norilsk Nickel, is discussing a full buyout or a merger, one of RUSAL’s shareholders told a newspaper on Tuesday. – more

Chengguang Stainless Steel Company in Qingdao has come under fire for searching each of its 1,000 plus employees after work every day because it doesn’t trust them not to steal company products. The company uses a metal detector to detect steel items. – translated article here

Beginning LME nickel inventory / Overnight Shanghai closing price

London Metal Exchange – plus 168 tons = 46,344 tonnes (2.29% – 1062 tonnes cancelled warrants/ 45,282 net stock level) (charts)
Shanghai Jinchuan nickel – 244500-251000 RMB/t, minus 3000 (charts)