WH, there is a link on that kitco site
maybe more info there
www.goldinsider.com
,
Printable View
WH, there is a link on that kitco site
maybe more info there
www.goldinsider.com
,
Followers of this thread may find the site below of interest........
http://hedgefundmgr.blogspot.com/
Arco
China's Food and Agriculture - looking to the future
http://www.ers.usda.gov/publications/AIB775/
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Markets - Zinc, copper, Aluminum
http://www.reuters.com/newsArticle.j...0&pageNumber=0
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CHINA COULD USE 15% MORE COPPER/YEAR.
http://www.iii.co.uk/news/?type=afxn...action=article
BEIJING (AFX) - China's demand for electrolytic copper will continue to grow 15 pct annually over the coming years, the official Xinhua News Agency reported.
Citing Tongling Nonferrous Metals (Group) Inc president Wei Jianghong, Xinhua said that the country's copper demand in 2004 was 1.7 mln metric tons.
Copper consumption has continued to increase at a growth rate of over 15 pct year-on-year since 2000, the report added.
derek.jiang@xinhuafinance.com
dj/ap/tr
High iron ore costs hit global steel firms
http://news.bbc.co.uk/2/hi/business/4289291.stm
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THanks Psycho
The great iron ore goldrush begins
Producers have been caught napping by a spectacular price rise, writes Andrew Trounson
February 26, 2005
"SOMEONE has stuffed up big-time," an MBA graduate schooled in the virtues of market research declared over her wine after hearing news that Australia's iron ore miners had secured an unprecedented 71.5 per cent hike in iron ore contract prices.
On top of a 120 per cent rise in coking coal contract prices earlier this year, the deal, effective from April, means Australia is set to reap billions of additional export dollars as it basks in the sunshine of one of the biggest commodity booms in history.
The surprise cave-in by the Japanese steel mills on benchmark contract prices also underscored the complete turnaround in recent years in the balance of power in the global minerals game, with the miners now able to dictate terms.
The coal and iron ore price rises will boost the Commonwealth Bank's index of Australia's commodity export prices by 19 per cent, putting the US dollar price index more than 40 per cent above the previous peak in 1989.
Shares in major miners BHP Billiton and Rio Tinto soared to record highs on the news, while shares in Australia's largest steel maker BlueScope dropped in the face of galloping raw material costs.
"What is going on in the raw materials area is quite frankly inflationary," BlueScope chief executive Kirby Adams said this week.
Steel makers are already raising prices and are considering slapping customers with surcharges.
But the MBA graduate couldn't quite believe that in this modern age of elaborate market analysis and forecasting such a price rise could have happened.
The easy answer is that no one had fully reckoned with the massive commodity demand that has been unleashed by China's rapid industrialisation and its emergence as the world's largest steel market, which feeds on the key raw materials iron ore and coking coal. China's steel consumption is set to rise over 10 per cent this year compared with 5 per cent growth forecast globally.
But the commodity price boom has been exaggerated by the unpreparedness of miners that are now struggling to ramp up production quickly enough after years of under investment because of previously low prices. And even as they scramble to dig more out of the ground, rail, port and shipping infrastructure can't keep up, causing bottlenecks and delays globally. In Australia, queues of shipping off ports has reached 50 vessels in some instances.
BHP Billiton chief executive Chip Goodyear said this month there was little spare capacity in the industry and that supplies of major commodities were set to continue to lag behind global demand this year.
"Demand romps on and the supply side is muted," Mr Goodyear said.
The shortage of shipping has caused the average freight rate from Australia to Japan to blow out to an average $US21.15 a tonne last year, compared with a previous 10-year average of $US7.74/tonne.
"Once miners see that the demand is real, then it takes time to bring production on, and, even if they accelerate, they face bottlenecks," Dallas Horadam, steel analyst at AME Mineral Economics in Sydney said.
The answer to the question, then, of who "stuffed up" lies partly with the miners, though they are hardly suffering for it as they pop their champagne corks. But the steel mills must also shoulder blame for not sending the right price signals to ensure a more orderly ramp-up of production.
Back in the 1980s and 1990s, Australian coal and iron ore price negotiators would troop off to Tokyo every year to bargain for prices, only to be played off against one another by the steel mills. The first to cave in of either BHP or Rio would be granted extra tonnage, sometimes only after the miner had agreed to a secret price discount. On returning to Australia, they would be routinely be criticised by unions facing job losses for not having bargained hard enough.
But the world has now been turned upside down.
In a sure sign that t
Changing Of The Guard
by Mark M. Rostenko
Editor, The Sovereign Strategist
February 24, 2005
It’s been an interesting week so far and one that may very well herald a major turning point in the U.S. financial climate. Stocks got battered after failing to penetrate the cyclical bull market high, copper surged to a new 14-year high, gold had its largest one-day advance in some time. And flying well below the mainstream radar, the CRB Index of commodity prices broke out to a new bull market high, its highest in decades.
Fascinatingly enough, while the prices of just about everything continued to surge into the stratosphere, the dingbat mainstream financial press worked overtime to assure everyone that prices aren’t actually rising. The “tame” CPI report “edged up a TINY 0.1%” we’re told. Energy costs “went down significantly” (someone ought to tell $51 crude oil which apparently doesn’t read the CPI data). According to official reports, it was merely a “small increase” and inflation “remained very much under control.” Tame tame tame!
Not to worry, Alan “I didn’t know it was a bubble” Greenspan assures us that inflation is “anchored”, whatever that means. Bear in mind this is the fellow who assured us that $40 crude oil was “transient.” I’ll say, given its swift transition into the $50s! Unfortunately for the spin doctors, reality spins a far different tale.
While the Wall Street/Pennsylvania Avenue machine works tirelessly to keep our attention fixated upon the “healthy” stock market and housing bubbles, the stealth bull market in commodity prices continues. And that doesn’t bode particularly well for mainstream financial vehicles.
There is an established inverse-cyclicality to the prices of hard assets and paper assets. In general, one is vastly outperforming the other and over the long haul, you don’t do well in both at the same time. According to Barry Bannister of Legg Mason Wood Walker, that cycle spans about 18 years, which is pretty much in line with my estimation of a 20-year cycle which I discussed in TSS during the very early stages of the current commodity bull.
When paper assets are flying higher, commodities tend to fare poorly and vice versa. In the 1970s many commodities surged to all-time highs, surpassing their previous records by huge margins while stocks languished. Two years after grand-daddy commodity gold topped out in 1980, stocks began an 18-year bull run that ended in 2000. With stocks topping out after 18 years and commodities in an emerging bull market, what are the odds that stocks will be the “next big thing” in coming years? In technical terms, pretty freakin’ slim. Unless of course this cyclical pattern was merely a 130-year fluke. And I sincerely doubt that.
You don’t have to believe in cycles to have faith in the bloody obvious. In order to sustain a long-term bull market you need long-term bullish fundamentals. Ask yourself: are conditions more or less favorable for stocks today than they were between 1982 and 2000? Well, let’s see. We have rising inflation. A housing bubble that must and will burst in time. We’re waging a costly war in Iraq and getting ready to wage another in Iran. The trade and budget deficits stand at all-time record highs, consumer and national debt are higher than ever and savings are near an all-time low.
Meanwhile, commodities are on fire, many of which still have plenty of room to go before breaching their lifetime highs. The fundamentals are undeniably and powerfully in place: China is consuming metals and oil like Rosie O’Donnell sucking up chocolate cakes after a gut-wrenching two hour fast. More importantly, supplies of many commodities have dwindled over the years as everyone shifted their focus to the easy-money paper asset boom of the 1990s.
Major U.S. steel mills went bankrupt and shut down over the past couple of decades. When’s the last time you heard about a major gold find or a major new mine coming on line? Many U.S. oil companies are pumping the same old wells, not having discovered too many new major oil fields in qui
World market could be hurt as severe coal shortage worsens in China
Sun Feb 27, 1:47 AM ET Business - AFP
BEIJING (AFP) - China's breakneck economic growth is causing a dangerous shortage of its most important energy source coal, with potential consequences for the entire world, state media warned.
Scarcity is so severe officials even worry aloud that it could cause social instability among the 1.3 billion Chinese, the China Business Weekly reported.
"The imbalance between coal demand and supply will become more acute this year," the National Development and Reform Commission said, according to the paper.
"Easing the tightened coal supply will be the first priority for us," said the commission, the nation's top planning agency.
China is the world's largest consumer and producer of coal, which accounts for about two thirds of its energy needs.
The impact of the coal shortage could be global since soaring domestic demand could force the government to cut off export quotas and push up global prices, the paper said.
Last year, when China's economy expanded by 9.5 percent, its voracious demand was a key factor in causing international prices of coal to double.
One of the first sectors to be affected when coal supplies are under pressure is the power industry, which consumes about half of China's coal output.
The paper said the government was concerned a disruption in the power supply during the Lunar New Year earlier this month could have sparked social instability.
To prevent this from happening, it ordered state-owned coal mines to operate throughout the week-long festival, while railroads were told to use the extra holiday runs to transport more coal.
The nation's coal consumption this year is expected to rise by 120 million tonnes, or six percent, to 2.1 billion tonnes, according to estimates by the China Coal Industry Association.
The problem is that the opening of new mines is likely to result in no more than an additional 100 million tonnes of coal in the course of 2005, the paper said.
"New coal mines cannot meet the faster demand. There is little room for additional production," the National Development and Reform Commission said.
"All kinds of coal mines are almost operating at full capacity, or beyond capacity, and the pressure on safety is huge," it said.
The safety issue was highlighted most recently in the Sunjiawan coal mine in northeastern Liaoning province, which was among the operations that carried on extraction throughout the Lunar New Year festival.
The mine's workers only had one day off and towards the end of the festival it was struck by tragedy when a gas explosion erupted, killing up to 215 in China's worst recorded coal industry disaster for over 60 years.
Even if overtaxed mines can produce the amount of coal needed to keep fueling the economy, there is not guarantee that it will reach the power plants and factories that need it.
Rail is the preferred method of transporting it from the mines in the north to the industrial centers in the east and south.
But the railway system is also overburdened by the hyperactive economy and last year more than 65 percent of all transportation requests had to be turned down, the paper said.
Copper Rises to Record in London on Japan's Industrial Output Feb. 28 (Bloomberg)
-- Copper reached a record high in London after Japan, the world's third-largest user, reported a bigger-than-expected increase in industrial production, signaling that demand for the metal may rise.
Copper for delivery in three months was up $41, or 1.3 percent, to $3,238 a metric ton on the London Metal Exchange at 10:36 a.m. It reached $3,275, the highest since the contract began trading in its current form in June 1986. The yen rallied, making copper cheaper to buy with the Japanese currency.
``Japan's industrial production in January is encouraging and that's driving copper higher,'' Liu Songtao, a trader at Dalu Futures Co., said from Beijing. ``If the dollar continues to slide, it's very likely we'll see copper trading at $3,500.''
Industrial production increased 2.1 percent from December, seasonally adjusted, Japan's Ministry of Economy, Trade and Industry said. Global copper use rose 7 percent last year to a record 16.4 million tons because of higher demand from China and Russia, exceeding new supplies by 579,000 tons, the U.K.-based World Bureau of Metal Statistics said in a report.
The benchmark copper contract in London had climbed as high as $3,260 on Feb. 22, topping a record set in January 1989. Prices for the metal, used in electrical wiring and power cables, have surged 41 percent since the start of last year.
Yen Rallies
The yen rose to 104.32 against the dollar, from 105.23 on Feb. 25, according to electronic currency trading system EBS. The euro was up 0.1 percent against the dollar to $1.3257.
``Copper is more a technical market than a fundamental market in recent weeks,'' said Kevin Tuohy, a trader at Man Financial in London. Funds are buying ``on the expectation that they are going to benefit from a lower dollar.''
Most of the five other metals traded on the LME followed copper higher. Aluminum, turned into beverage cans and car parts, rose $23, or 1.2 percent, to $1,914 a ton. It had fallen for two days from a 10-year high of $1,987.50. Zinc, used to coat steel, jumped $16, or 1.2 percent, to $1,396, lead climbed $5, or 0.5 percent, to $950 and tin was unchanged at $8,375.
Shares of BHP Billiton and Rio Tinto Group, which own stakes in the world's two largest copper mines, rose in London as the companies sought price increases for iron ore sold to steelmakers. Melbourne-based BHP, the world's biggest mining company, was up 11 pence, or 1.4 percent, to 779 pence. London- based Rio, the No. 3 mining company, rose 18 pence, or 1 percent, to 1,845 pence.
Rio and Brazil's Cia. Vale do Rio Doce, the world's largest iron-ore producer, last week won price increases of 71.5 percent from Nippon Steel Co., Japan's biggest steelmaker.
Electronics Gains
Japan's manufacturing gain was led by electronics companies such as Toshiba Corp., which use copper in wiring and components, and exceeded the median forecast of 1.5 percent from 26 economists surveyed by Bloomberg News. Industrial output rose 3.1 percent in South Korea, Asia's third-largest economy, the most in more than a year, that nation's statistics bureau said.
Japan unexpectedly slipped into recession last year for the fourth time since 1991 as export growth slowed and consumer spending stalled. The economy shrank at an annual 0.5 percent pace in the three months ended Dec. 31, the third quarter of contraction.
China and the U.S. are the world's two largest copper consumers. China's economy grew 9.5 percent last year and the U.S. expanded 4.4 percent, the most since 1999. Russia's economy grew 7.1 percent because of rising oil, natural gas and metals prices, the government estimated on Feb. 2.
Draining Inventory
Consumers have relied on stored metal as production lags demand. Inventory in LME warehouses has slid 88 percent since the start of 2004 to 53,975 tons, less than two days' global use.
Mining companies like BHP, Chile's state-owned Codelco and Phoenix-based Phelps Dodge Corp., the second-largest