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Monthly Archives: October 2012

Copper Rises From Six-Week Low as Industrial Metals Gain

Copper Rises From Six-Week Low as Industrial Metals Gain

 By Bloomberg News

Copper recovered from a six-week low on speculation that China, the largest user, will introduce more measures to support growth, boosting demand for metals.

Copper for delivery in three months gained as much as 0.7 percent to $8,009 a metric ton on the London Metal Exchange, before trading at $7,953 at 2:04 p.m. Shanghai time. Futures fell to $7,930 yesterday, the lowest level since Sept. 7.

China added 13 railway projects to this year’s investment plan, increasing the number to 22, the Economic Information Daily reported today, without citing anyone. The country approved last month plans to build about 1,250 miles (2,000 kilometers) of roads, 25 new subway and inter-city rail projects as well as port and warehouse developments. Premier Wen Jiabao said the “economic growth has started to stabilize,” the Xinhua News Agency reported on Oct. 17.

“We expect the Chinese economy to gradually improve into the first quarter,” Zhang Sida, an analyst at Dalu Futures Co., said by phone from Shanghai. “The demand is not good, but it should improve as a stabilizing equities market indicates.”

China’s benchmark stock index rose to a six-week high yesterday on speculation regulators will introduce measures to bolster equities before a once-a-decade leadership transition next month. The Shanghai Composite Index (SHCOMP) traded 0.7 percent lower today.

January futures fell 0.5 percent to 57,580 yuan ($9,215) a ton on the Shanghai Futures Exchange. December futures on the Comex in New York were little changed at $3.6175 a pound.

Oct 23, 2012

Midwest aluminum spot business slows

Midwest aluminum spot business slows .

Suzy Waite

Spot P1020 business has given way to discussions between producers, traders and consumers focusing on next year’s supply contracts.

Few deals were closed as a result, which kept Midwest aluminum spot premiums firmly between 11 and 11.50 cents per pound.

“The spot market’s pretty quiet. We’re mostly talking about 2013 these days. It’s in full swing now. Just this week, we booked a lot of deals,” a producer told AMM.

“It’s been a quiet week. We did a little forward business, but I think (spot) is slowing down,” a trader added. “I don’t think people want to go to the year-end too metal-heavy. We’re still negotiating contracts, but with the price coming off this week, discussions are getting more aggressive.”

Some were surprised at how slow the spot market was given the recent drop in the price of aluminum. On Friday, three-month aluminum on the London Metal Exchange closed at $1,997.50 per tonne, falling below the $2,000-per-tonne mark for the first time since Sept. 7.

“I expected more (spot) activity because the price came back down, but I didn’t see it,” a second trader said.

It’s likely a case of seasonality, with producers and consumers looking to end the year with lean inventories, the second trader said.

“It just means people don’t need to buy, and they’re not looking at the price to make a decision,” the second trader said. “When demand is there and they need to restock, they’ll do it. But no one wants metal at year-end.”

“October, November, December, typically things cool down,” the producer said. “There’s some maintenance done around the industry, too, so I wouldn’t expect too much spot.”

Although inventories in LME-approved warehouses dropped slightly—stocks in Detroit dipped to 1.455 million tonnes on Sept. 10 from 1.458 million tonnes the previous day—metal remains locked in financing deals or long queues, keeping supply off the market.

That trend appears unlikely to change next year.

“I’m still finding (the) supply side is tight. If you have LME metal, you’re sitting pretty. But if you don’t, it’s going to be a tough year. Talking with the producers, they’re not doing you any favors,” a third trader added. “Everything seems to be pointing to tight supply next year.”

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Oct. 12, 2012

METALS-Copper rebounds on dollar, gains crimped by growth fears

METALS-Copper rebounds on dollar, gains crimped by growth fears

    By Susan Thomas and Eric Onstad
 Copper bounced on Thursday from two-week lows as
the dollar fell, but the gains were likely to be capped as investors fret about
the growth outlook for big metals consumer China and the grinding debt crisis in
the euro zone.
    Three-month copper on the London Metal Exchange closed 0.9 percent
higher at $8,239.50 per tonne after hitting a two-week low of $8,105 earlier in
the day.
    The recovery was helped by a weaker dollar after the euro rose. A
softer dollar makes commodities priced in the U.S. currency cheaper for holders
of other currencies.
    Industrial metals fell on Wednesday after Chinese car sales disappointed,
adding to downward pressures from a slowing economy and rising fuel costs that
have weighed on the world’s biggest auto market.
    Aluminium producer Alcoa followed that news with an announcement that
it was lowering its demand forecast.
    Copper prices have rallied nearly 10 percent after monetary easing
announcements by the U.S. Federal Reserve and a bond buying promise by the
European Central Bank on Sept. 6, but have been moving sideways since touching a
4-1/2 month high about three weeks ago.
    Ross Strachan, an economist at Capital Economics, said prices could be
pressured after China publishes trade data this weekend and its gross domestic
product figures next week.
    “I think there is a likelihood that GDP could be weaker than some in the
market are anticipating, and therefore that will perhaps drag on metals prices,”
Strachan said.
    China is scheduled to publish third-quarter GDP data next week, with
investors anticipating a seventh straight quarter of slowing growth, and
economists were reluctant to make fresh forecasts so close to the release date
as they run the risk of having to immediately revise their assumptions.

    Deutsche Bank said feedback from a recent field trip by the bank’s equity
analysts to China showed general sentiment in the industrial metals sector
remained bearish.
    China is the world’s top consumer of metals, accounting for 40 percent of
refined copper demand last year.
       
    TEPID
    Tepid demand growth and improving mine supply will swing the copper market
into a 458,000-tonne surplus next year, snapping a three-year run of deficits,
the International Copper Study Group (ICSG) said on Wednesday.
    Along similar lines, China’s demand signals remained so slack for the fourth
quarter that some manufacturers were considering further exports of surplus
stock, a China copper analyst at a producer said.
    “Seasonally, in July and August we expect weaker demand but by October it
should improve. But some copper semis producers are saying that Q4 orders are in
line with Q3, and maybe even have declined a little bit. They’re talking about
exporting their extra copper to foreign countries,” she said.
    “Codelco import cathode negotiations are coming up and so are TC/RC
(treatment and refining charge) talks, so we can find a signal on growth
expectations for next year. There may be some change in sentiment after LME Week
in London next week,” she added.
    Top copper producer Chile’s Codelco is expected to agree on term
premiums of around $105 for shipments of refined copper cathode to China during
the industry’s key event, LME Week, when smelters will also hammer out 2013
processing fees with miners.
    A resumption in tin shipments from Indonesia, the world’s top exporter,
could weigh on prices that rallied more than 10 percent in September in part as
markets responded to a halt in exports.
    Refined tin exports gained 75 percent last month to 9,874.47 tonnes from
5,645.87 tonnes in August, a trade official said.
    LME three-month tin ended 0.3 percent firmer at $21,900 per tonne.
    UBS was moderately optimistic about aluminium in its commodity price review.
    “We expect a 5 percent lift in the price going into 2013, reflecting further
production capacity cuts,” said analyst Myles Allsop in a note.
    Three-month aluminium did not trade at the close, but was bid at
$2,015 per tonne, up $6 from Wednesday’s close.
    In other metals, LME zinc slipped 0.4 percent to close at $1,967 per
tonne, lead shed 0.6 percent to $2,183 and nickel edged 0.3
percent higher to $17,725 a tonne.
  
Thu Oct 11, 2012 12:16pm EDT 

Official PMI shows limited upturn

Official PMI shows limited upturn

 

By Du Juan

 

The official manufacturing purchasing managersindex for China rose slightly in September, signaling the first upturn after four months of successive declines.

However, manufacturing activity contracted for a second straight month, indicating that the economy is still slowing. 

Chinas PMI rose to 49.8 in September from 49.2 in August, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing on Monday

A reading below 50 indicates contraction, while one above that level indicates expansion

Augusts PMI figure was the lowest since November 2011, indicating that the country is still in the grip of an economic downturn

The September sub-indexes in most sectorsespecially for new orders and raw material inventoriesalso rose, suggesting that policies to stimulate economic growth are taking effect, said the bureau and the federation in their statement

The September sub-index for new orders, the main driver of the PMI rebound, rose by 1.1 points to 49. 

Demand for tobacco, food, beverages, clothing and electronic appliances increased, but refined metals, special equipment and steel remained at a low level

Chinas steel industry has been in the doldrums since October 2011. Thats as the central governments tightening policies on the real estate industry have affected the domestic demand for construction steel

Hampered by the high price of raw materials, overproduction and falling demand, steel companies have reported huge losses since the first quarter

September and October are usually busy months for the industry, but analysts said things will be quiet this year and most steel producers will report losses again when Septembers results are released

The output sub-index rose 0.4 points to 51.3, meaning that manufacturing production is rising

The tobacco, clothing, food and information technology sectors are seeing output increase, but the sub-indexes for steel, printing and refined metals are still below 50, indicating a decline in September

The PMI for large-scale enterprises was 50.2, 1.1 points higher than in August. Meanwhile, the reading for small businesses fell by 0.1 points month-on-month to 49.8 and medium-sized enterprises saw a month-on-month decline of 1.0 to 46.7. 

The employment sub-index fell 0.2 points to 48.9, the fourth successive month below 50, reflecting ongoing job losses in the manufacturing sector, with metals and autos bearing the brunt of the downturn

The purchasing price index for raw materials rose to 51.0 in September from 46.1 in August. The previous four months all had readings below the midpoint 50 figure

Prices of raw materials are still rising in some industries, especially oil refining and chemicals

However, raw material prices for the steel and metals industries are falling. The purchasing price index for raw materials in those industries was below 40. 

An independent PMI figure released by HSBC increased slightly to 47.9 in September from 47.6 in August, a nine-month low

The HSBC survey is heavily focused on small and medium-sized companies

Economists said Chinas economy is still facing difficulties

The data continues to reinforce the hard landing that we have predicted for China, because this is the second consecutive month of a sub-50 reading,” said Prakash Sakpal of ING in Singapore, quoted by Reuters

Sakpal forecast that economic growth will be around 7 percent in the third and fourth quarters

Updated: 20121002 07:45

By Du Juan ( China Daily)

 

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