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Copper to Climb on Chinese Demand This Year

Copper to Climb on Chinese Demand This Year

By Bloomberg News

Copper may advance this year as consumption in China, the world’s biggest user of the metal used in wires and pipes, is poised to expand, said Li Baomin, chairman of Jiangxi Copper Co. (358), China’s largest producer.

“Demand growth momentum is strong on expansion of urbanization,” said Li, whose promotion as chairman of the Jiangxi-based company was announced in Beijing yesterday. “Global copper market is expected to be in balance,” he said without giving a forecast for Chinese demand growth.

Copper use in China will jump 8 percent to a record 8.833 million metric tons this year, boosting global demand and creating a 6,000-ton product deficit, compared with a surplus of 216,000 tons in 2012, according to Goldman Sachs Group Inc. The metal tumbled 4.3 percent last month on the London Metal Exchange, erasing gains this year.

Copper may trade in a range of $8,000 a ton and $8,300 a ton this year with the average price of about $8,100, Li told reporters at the National People’s Congress in Beijing today. The metal for delivery in three months rose 0.6 percent to $7768.25 a ton at 7:28 p.m. Beijing time.

Jiangxi may produce as much as 1.22 million tons of refined copper this year, compared with 1.2 million tons in 2012, Li said. Exports will depend on the price differential between Shanghai and London, he said.

Surplus copper in China was 1 million to 1.5 million tons last year, “far more significant than the reported 600,000-ton build in bonded warehouse inventory,” David B. Wilson, an analyst at Citigroup Inc., said in an e-mailed report yesterday.

Mar 5, 2013 6:59 AM ET

U.S. to become biggest oil producer – IEA

U.S. to become biggest oil producer – IEA

By Mark Thompson

The United States will overtake Saudi Arabia to become the world’s biggest oil producer before 2020, and will be energy independent 10 years later, according to a new forecast by the International Energy Agency.

The recent resurgence in oil and gas production, and efforts to make the transport sector more efficient, are radically reshaping the nation’s energy market, reported Paris-based IEA in its World Energy Outlook.

North America would become a net exporter of oil around 2030, the global organization said Monday.

“The United States, which currently imports around 20% of its total energy needs, becomes all but self sufficient in net terms — a dramatic reversal of the trend seen in most other energy importing countries,” the IEA stated.

The U.S. is experiencing an oil boom, in large part thanks to high world prices and new technologies, including hydraulic fracking, that have made the extraction of oil and gas from shale rock commercially viable.

From 2008 to 2011, U.S. crude oil production jumped 14%, according to the U.S. Energy Information Administration. Natural gas production is up by about 10% over the same period.

Related: the facts about oil and gas under Obama

According to the IEA, U.S. natural gas prices will rise to $5.5 per million British thermal units (MBtu) in 2020, from around $3.5 per MBtu this year, driven by rising domestic demand rather than a forecast increase in exports to Asia and other markets.

“In our projections, 93% of the natural gas produced in the United States remains available to meet domestic demand,” it said. “Exports on the scale that we project would not play a large role in domestic price setting.”

North America’s new role in the world energy markets will accelerate a change in the direction of international oil trade toward Asia, and underscore the importance of securing supply routes from the Middle East to China and India.

The IEA said it expects global energy demand to increase by more than a third by 2035, with China, India and the Middle East accounting for 60% of the growth, and more than outweighing reduced demand in developed economies.

That will push world average oil import prices up to $125 per barrel (in 2011 dollars) by 2035, from around $100 per barrel at present, but they could be much higher if Iraq fails to deliver on its production potential.

Iraq is set to become the second largest oil exporter by the 2030s, as it expands output to take advantage of demand from fast growing Asian economies.

Related: Iraq oil output to double by 2020

New fuel economy standards in the U.S. and efforts by China, Japan and the European Union to reduce demand would help to make up for a disappointing decade for global energy efficiency.

“But even with these and other new policies in place, a significant share of the potential to improve energy efficiency — four-fifths of the potential in the buildings sector and more than half in industry — still remains untapped,” the IEA stated.

Policymakers are still missing out on potential benefits for energy security, economic growth and the environment.

Growth in demand over the years to 2035 would be halved and oil demand would peak just before 2020, if governments took action to remove barriers preventing the implementation of energy efficiency measures that are already economically viable, the global organization said.

First Published: November 12, 2012: 7:02 AM ET

Copper Set for Second Weekly Advance on Signs of China Recovery

Copper Set for Second Weekly Advance on Signs of China Recovery

By Bloomberg News

Copper gained, poised for a second weekly advance, after signs that China’s economy is rebounding raised expectations that consumption in the world’s largest user will increase next year.

Metal for delivery in three months rose 0.2 percent to $7,728 a metric ton on the London Metal Exchange at 3:18 p.m. in Shanghai, after falling as much as 0.6 percent. It’s gained 1.6 percent this week, extending last week’s 0.5 percent climb.

“Copper will probably continue to be traded at $7,700 to $7,800,” said Wang Na, an analyst at Guolian Futures Co. While Europe has again become a concern, China seems to be improving and a tight global market is underpinning prices, Wang said.

China’s factory output may have expanded for the first time in 13 months in November, according to a preliminary survey from HSBC Holdings Plc and Markit Economics yesterday. Codelco, the largest producer, reported a 5 percent drop in nine-month output to 1.25 million tons as ore grades fell at its Chilean mines.

The February-delivery copper contract closed 0.2 percent higher at 56,140 yuan ($9,014) a ton on the Shanghai Futures Exchange. The March-delivery contract rose 0.2 percent to $3.514 a pound on the Comex in New York. Tin, nickel and zinc climbed in London, while aluminum and lead were little changed.

Nov 23, 2012

Metals Climb on China Export Growth as Stocks Fluctuate

Metals Climb on China Export Growth as Stocks Fluctuate

By Stephen Kirkland and Jason Clenfield

Industrial metals advanced with the Australian and New Zealand currencies as China’s exports topped forecasts. European stocks swung between gains and losses before the region’s finance chiefs meet to discuss Greek aid.

Copper jumped 0.7 percent at 8:20 a.m. in New York. The yuan climbed to a 19-year high and the so-called Aussie gained against its 16 major peers. The Stoxx Europe 600 Index slipped less than 0.1 percent, with trading volume 14 percent below the 30-day average. Standard & Poor’s 500 Index futures added 0.3 percent, indicating the benchmark gauge will rebound from its worst week in five months. Spain’s 10-year note yield rose four basis points. U.S. bond markets were closed for a holiday.

China’s exports jumped 11.6 percent in October, more than the 10 percent median estimate in a Bloomberg survey of 30 analysts, data from the customs administration showed on Nov. 10. European finance ministers meet later today in Brussels after Greek lawmakers passed a 2013 budget needed to unlock bailout funds.

“Global industrial production momentum has begun to improve, led by the U.S. and China,” Aditya Bagaria, a currency strategist at Credit Suisse Group AG in London, said in a report received today. “But for now, risk appetite and risky assets are more likely to be driven by perceptions of progress on the key political uncertainties.” In Europe, “risks for further delays on Greek issues are high at today’s Eurogroup meeting,” Bagaria said.

Fiscal Cliff
Lawmakers from both major U.S. parties and investors including Pacific Investment Management Co. predicted a resolution to the standoff on the so-called fiscal cliff that threatens to trigger $607 billion in tax increases and spending cuts. Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, said a “framework agreement” can be reached. Pimco, which runs the world’s largest bond fund, sees as much as a 70 percent chance a compromise will be struck.

Copper rebounded from the lowest close since August and aluminum added 1.2 percent. China is the biggest buyer of copper and aluminum. Oil in New York fell 0.5 percent to $85.63 a barrel. Soybeans declined as much as 2.1 percent to $14.2125 a bushel, the lowest since June 29.

The Australian dollar rose 0.5 percent versus the U.S. currency and New Zealand’s dollar strengthened 0.4 percent. The euro appreciated 0.1 percent to $1.2727 after sliding to $1.2690 on Nov. 9, the weakest level since Sept. 7.

China’s yuan strengthened to 6.2291 per dollar. The central bank raised its reference rate and the securities regulator said a government quota will be increased to allow more yuan raised overseas to be invested in domestic capital markets.

Telecom Italia
In Europe, Telecom Italia SpA (TIT) climbed 4.6 percent as a person with direct knowledge of the bid said Egyptian billionaire Naguib Sawiris, founder of Orascom Telecom Holding SAE, offered to purchase a stake in the Italian phone company. Cobham Plc tumbled 7.8 percent as the world’s largest maker of airborne-refueling equipment forecast weaker sales and profitability next year.

The MSCI Asia Pacific dropped 0.4 percent and the Nikkei 225 Stock Average slid 0.9 percent after a report showed Japan’s economy contracted last quarter by the most since the earthquake and tsunami in early 2011.

Three stocks fell for every two that gained in the MSCI Emerging Markets Index (MXEF), which was little changed. India’s Sensex lost less than 0.1 percent after industrial production unexpectedly fell, while Russia’s Micex Index increased 0.4 percent. Brazil’s Bovespa index slipped 0.2 percent. South Korea’s Kospi Index slipped 0.2 percent. The Shanghai Composite Index (SHCOMP) climbed 0.5 percent.

Gasoline prices post biggest fall in nearly 4 years

 
 
 
By Sinead Carew; Editing by Marguerita Choy
The average U.S. price for a gallon of regular gasoline took its biggest drop since 2008 in the past two weeks, due to lower crude oil prices, a big price drop in pump prices in California and Hurricane Sandy, according to a widely followed survey released on Sunday.

Gasoline prices averaged $3.5454 per gallon in the United States on Nov. 2, down 20.75 cents from Oct.19 when drivers were paying $3.7529 at the pump, Lundberg said. The decline was the biggest two-week price drop since the survey recorded a 21.9 cents price decline Dec. 5, 2008 due to a crash in petroleum demand during the global recession.

In Chicago, gas prices averaged $3.599 Sunday, down a penny from last week, according to the AAA Fuel Gauge report. Prices are down 10 percent from a month ago when regular gasoline averaged $4.01 in the Chicago area.

Even though many people had to line up for gasoline for hours after Sandy devastated much of the Northeast coast, the storm played a part in the price decline as many would-be consumers were not able to travel as a result, according Trilby Lundberg, editor of the Lundberg Survey.

Lundberg also cited the seasonal dip in demand that typically comes after August.

While demand appeared to be very high for gasoline in New York and New Jersey after the storm, Lundberg said that purchases were down because many people could not get to fuel.

However, supply shortages were not causing an increase in the average price of gasoline, according Lundberg.

“There is a fear among retailers that they will be accused and prosecuted for price gouging if they raise prices enough to prevent running out,” she said, adding that the problems would be unlikely to end soon.

“It’s going to be a long and hard recovery for infrastructure and fuel supply but also for fuel demand,” Lundberg said.

Another reason for the total U.S. price decline in the latest survey is California, the biggest state consumer, where pump prices fell 49 cents in past two weeks after an extreme price increase a month ago because of refinery problems.

The November 2 survey shows that gas prices have fallen a total of 29.21 cents in the last month, Lundberg said.

The highest prices for regular gasoline recorded in the November 2 survey were in San Francisco at $4.05 a gallon, while drivers in Memphis, Tennessee were paying the least at $3.11 per gallon.
7:41 a.m. CST, November 5, 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.”

AMM ensures that you’ll have all the necessary tools to gain a complete education in the metals industry. You’ll have an understanding of the forces that move the markets, how conditions in the overall economy will likely impact the industry, complete coverage of labor issues, consolidations, and movements of key executives, how demand in emerging markets will impact global supplies, and anything else that could potentially impact your business if you buy and sell metal in the North American markets. A small annual investment in your AMM subscription will return huge dividends to the bottom line of your business by allowing you to make informed strategic decisions.

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)

 

Copper falls as investors await signs of real demand

Copper falls as investors await signs of real demand

By Maytaal Angel

Copper hit a one-week low on Monday as a rally driven by infrastructure plans in China and policy easing by the European Central Bank and the U.S. Federal Reserve ran out of steam, and as the euro sank on renewed uncertainty over Spain.

The euro fell versus the dollar as investors fretted over when Spain will seek external aid, a condition for the ECB to start buying Spanish bonds. Also weighing was a weaker-than-expected German Ifo business climate reading.

A weak euro makes dollar-priced metals costly for European and other non-U.S. investors.

Copper was also weighed by weak demand from top consumer China ahead of a week-long national holiday, and as Chinese manufacturers were still waiting to see orders from Beijing’s infrastructure expansion plans.

Benchmark three-month copper on the London Metal Exchange edged down 0.86 percent to $8,210 a tonne by 0950 GMT, having earlier hit its lowest in more than a week at $8,182 a tonne.

Copper, used in power and construction, hit a 4-1/2 month high last week of $8,422 a tonne.

“People are in a wait and see mode. I think markets don’t appreciate what the impact can be. Most of these (central bank) measures are unlimited in nature, they take time to flow through. We see prices pretty well supported through to the year-end,” Macquarie analyst Ryan Belshaw said.

Daily LME data showed copper stocks rose 475 tonnes to 219,950 tonnes, adding to last week’s 2,775 tonne jump, while Shanghai inventories jumped by 10,428 tonnes.

Still, the global refined copper market was facing a deepening production deficit this year.

In its latest monthly bulletin, the International Copper Study Group (ICSG) said the market stood in a 473,000-tonne deficit in the first half of this year, compared with a deficit of 131,000 tonnes in the first six months of 2011.

“The deficit in the same period a year earlier was ‘only’ 131 thousand tons. A sharp 7.3 percent year-on-year increase in apparent demand is to blame for the growth in the deficit,” said Commerzbank in a note.

“In the medium to long term, we believe the (copper) price has further potential.”

Mirroring this view, bullish bets on U.S. commodities held by hedge funds and other big speculators had risen by $30 billion since the end of July as they bought into oil, metals and crop markets, anticipating higher prices from stimulus measures, trade data showed.

SQUEEZE ON SPREADS

In other metals traded, aluminium fell 1.18 percent to $2,090, while tin fell 2 percent to $20,130 a tonne.

Most of the tightness seen last week on nearby spreads has dissipated since the September contract expired, though both markets remain tight overall, with record stock levels in aluminium doing little to relieve the situation.

The “tom/next” spread, representing the cost to roll over an expiring contract to the following day, in aluminium was down to a $6.50 backwardation from as high as $40 last week. In tin it fell to $1 from $25 last week.

In other metals, zinc used in galvanizing fell 1.04 percent to $2,095 a tonne, stainless steel ingredient nickel fell 0.96 percent to $18,000 and battery material lead fell 1.33 percent to $2,257.50.

Daily data showed LME lead stocks continued their decline, receding to 281,250 tonnes, down more than 10 percent since late June.

LONDON | Mon Sep 24, 2012 3:49pm IST