Copper prices fell to a two-year low earlier this month. The other London-traded base metals followed a similar pattern. In what we view as merely extremely oversold conditions, copper staged a mighty 10% rally. The other metals consolidated but continued to hover near their lows.
An indication, perhaps, that the recovery in copper prices was tied more to short covering than a resurgence in demand for industrial metals. Indeed, we find that the supply/demand situation for copper continues to head in a bearish direction…………………………………….Full Article: Source

Weaker metals prices overall spurred speculators to shed some of their bullish precious metals futures and options positions at the Comex division of the New York Mercantile Exchange, according to U.S. government data.
For the week ended May 7, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in precious metals drop across the board in disaggregated report. In the legacy report, action was similar, although silver saw a mild gain in the net-long position. Speculators decreased their net-short position in copper in both reports as prices for the red metal rose………………………………………..Full Article: Source

It seems that everyone “knows” that silver is going lower. In fact, almost all of mainstream media is certain that lower levels are going to be seen in the metals. But, when everyone in the mainstream is so certain about lower levels, it is usually the time for the market to shake them out of that notion, just before it proves them right.
As I noted in my recent gold article, Dave Kranzler published an article on Seeking Alpha recently, wherein he did a nice job in compiling the sentiment numbers across many of those tracking market sentiment…………………………………..Full Article: Source

Platinum and palladium markets may witness deficits in 2013 and continue with the trend in 2014 as the challenging mine supply backdrop overshadows the modest recovery in demand anticipated for later in the year, stated London based Barclays in its recent market analysis.
Although the bank does not expect that the production losses to the magnitude suffered last year. Given the pick-up in recycling toward the end of last year, Barclays sees scope for supply to be revised up from the preliminary estimates released in November…………………………………..Full Article: Source

Copper prices may witness further upward movement as market positioning is still short with positive demand signals from China. The base metal prices may rise above $7,500 per ton before re-stabilising shorts, stated London based Barclays in its recent market report.
Last week, across the base metals complex, short-covering dominated price dynamics. In the context of extreme CTA short positioning, a stronger-than-expected US employment report alongside a surge in German factory orders for March combined to act as catalysts to fuel the move in prices…………………………………..Full Article: Source

Despite their more optimistic view of the global economy, an Ernst & Young survey of 193 mining and metals sector executives finds only 24% are focused on mergers and acquisitions. Those surveyed anticipate 91% of mining and metals M&A deals will be below US$500 million in value.
“Instead, companies are opting for lower risk organic growth, optimizing capital structure and strategic divestments,” said E&Y in its latest Global Capital Confidence Barometer. “For those among which M&A is still a priority, smaller bolt-on acquisitions are preferred.”………………………………….Full Article: Source

The results of Thomson Reuters GFMS’ Platinum & Palladium Survey 2013 are in, and the news looks good for palladium investors. According to the precious metals consultancy, palladium recorded its highest deficit in 11 years in 2012. Specifically, supply of the metal fell to 8.19 million ounces, a 4-percent decline, while usage grew 5 percent, hitting 9.32 million ounces. That created a 1.12-million ounce gap between supply and demand, a sizeable increase over 2011′s 279,000-ounce deficit.
Residual deficit for the year (calculated by taking Russian stockpile sales and ETF demand into account) came in at 1.16 million ounces, down from a residual surplus of 1.05 million ounces in 2011………………………………….Full Article: Source

This may be the best time in more than a decade to invest in palladium. Normally known for its volatility, the white metal is about to enter a period unlike anything the precious metals sector has ever seen. Most folks don’t know it, but palladium is 30 times more rare than gold. And worse yet, 80% of the globe’s supply comes from just two countries – South Africa and Russia.
The supply situation is a mess… and it’s about to get much worse. In Africa, the problem is simple. Mines lose huge amounts of money each year pulling palladium out of the ground. An overreaching government has made it all but impossible to modernize the mining process………………………………………..Full Article: Source

A rally in platinum prices is in danger, as promised production cuts from the world’s biggest miner of the metal face opposition from the South African government. Prices are up 6.3% since mid-April, when they plunged alongside gold and other precious metals.
But even bullish investors say there is a wild card that could undo recent gains: the outcome of negotiations between Anglo American Platinum Ltd.,which produces about 40% of the world’s platinum, and the South African government………………………………………..Full Article: Source

Copper has led the London Metal Exchange (LME) to a stellar close, after an interest rate cut from the European Central Bank (ECB) and upbeat US employment data spurred a massive short-covering rally in the recently heavily sold base metals.
At the close of open-outcry trading, LME three-month copper was up some 6.2 per cent on the day at $US7,270 a metric ton, having been dragged out of a bear market by a strong surge of short-covering aided by a stronger euro, heightening the appeal of the US dollar-denominated metals to euro holders………………………………………..Full Article: Source

Labour disruptions in South Africa pushed the platinum market into a narrow deficit in 2012, for the first time in seven years, Thomson Reuters GFMS said on Thursday.
Speaking at the launch of the group’s Platinum & Palladium Survey in Johannesburg, Thomson Reuters GFMS, Research Director for Mining, William Tankard, said the market swung to a marginal deficit of 83,000 ounces in 2012………………………………………..Full Article: Source

Palladium’s deficit rose to the biggest in 11 years in 2012 as strike action in South African mines curbed supply and demand expanded, Thomson Reuters GFMS said. Platinum slipped into a deficit for the first time since 2004.
Palladium supply fell 4 percent to 8.19 million ounces as usage expanded 5 percent to 9.32 million ounces, the highest on record, the London-based researcher said today in a report. Excluding sales from Russian state stocks and investor selling, demand outstripped supply by 1.12 million ounces, the biggest gap since the 1.3 million-ounce shortfall in 2001, GFMS said………………………………………..Full Article: Source

Only a short time ago it seems (five or six years actually) the uranium price was riding high, uranium explorers were springing up everywhere and uranium producer and explorer shares were among the strongest in the mining sector.
The spot price soared to close on $140/lb in 2007, but then collapsed to the $40 or so level by early 2009 before making something of a recovery up to around $70/lb by early 2011, and seemed to be progressing upwards again with all kinds of predictions of huge growth in nuclear power leading to shortages ahead. Investors were beginning to climb in again – and then came Fukushima!……………………………………….Full Article: Source

In the wake of the recent collapse of several commodity markets, Dennis Gartman of The Gartman Letter has some surprising things to say about where to look for shortages that could drive prices back up.
In the wake of the recent collapse of several commodity markets, Dennis Gartman of The Gartman Letter has some surprising things to say about where to look for shortages that could drive prices back up………………………………………..Full Article: Source

The move lower is base metals portends poorly for the U.S. and global economies, commodities trader Dennis Gartman said Wednesday on CNBC. “Dr. Copper Is Sick,” he said, adding that prices for aluminum and zinc were also heading lower. “And they don’t argue for good economic growth.”
On “Fast Money,” Gartman said that while the growing copper inventories in Shanghai, London and the Comex were nothing new, the move in other commodities were cause for concern………………………………………..Full Article: Source

Large speculators returned as sellers of precious metals futures and options on the Comex division of the New York Mercantile Exchange and the Nymex, trimming back exposure in all precious metals and slashing gold positions, according to U.S. government data.
For the week ended April 23, large speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report saw their net-long positions in precious metals fall across the board, with the gold net-long position in disaggregated reports fall to its lowest level since mid-March. For the legacy report, the gold net-long is the smallest since early November 2008. Reductions in silver and the platinum group metals were less severe, but still saw a reduction. In copper, speculators reduced their net-short position………………………………………..Full Article: Source

Palladium prices may average $748/oz in 2013, and rise to an annual average of $795/oz in 2014, stated London based Barclays in its recent market analysis.
“We forecast the palladium market to remain in deficit for a second year, and we do not see this as a short term phenomena. We believe this will be the start of serial annual deficits for the market,” it added.From a deficit of over 1Moz in 2012, Barclays expects the palladium market to deliver a deficit of 700koz in 2013, followed by 639koz in 2014………………………………………..Full Article: Source

Futures contracts in most metals traded on the London Metals Exchange spiked on Friday, rebounding from falls earlier in the week following worries over Chinese growth. Copper futures smashed through an 18-month low on Tuesday, trading below $7,000 a tonne.
Manufacturing activity in China had dipped, prompting concerns that the major driver of global growth was about to stall. Indeed, China is responsible for 40pc of global refined copper demand, so any slowdown will hit demand for the metal particularly hard………………………………………..Full Article: Source

Over the next couple of weeks it appears likely that the base metals complex may see some short-covering as Chinese merchants/speculators square positions heading into holidays early next week (May Day), stated Frankfurt based Deutsche Bank (DB) in its recent market analysis.
Furthermore an exhaustion in selling by Western funds concerned about disappointing economic growth appears to have been reached.The magnitude of buying may depend partially on how CTAs respond and, of course, if there is an improvement in economic data after the recent disappointment – certainly the recent jobless claims data from the US is easing concerns………………………………………..Full Article: Source

Russia plans to invest $1 bln in the extraction of rare earth metals to compete with market leader China which controls around 97% of world production.
State-run Rostekh and the IST group of companies, owned by businessman Aleksandr Nesis, are planning to create a joint venture, Kommersant daily reported, citing sources close to the developments………………………………………..Full Article: Source

Thanks to the strong dollar, commodity prices have been pretty depressed over the past few months. It also doesn’t help that many are looking for a slowdown in China, a key market for commodity demand.
This is especially true in the base metal market, as China is easily the biggest consumer of copper (and other industrial metals) in the world. So, when this important country is experiencing sluggish growth-and when the dollar is strong-it can be a rough period for copper investors………………………………………..Full Article: Source

Europe’s share of international coal trading is rising despite a sluggish economy, as a collapse in emissions permit prices and a global oversupply of coal bolsters the fuel’s profitability in power generation.
Global coal use has been steadily rising, driven largely by soaring demand in developing economies such as China and India. But high European gas prices and healthy production levels from exporters have also made coal more attractive for electricity generation in Europe, prompting a rise in coal burn despite efforts by policymakers to curb carbon emissions………………………………………..Full Article: Source

Demand for metals is likely to increase tenfold as developing economies surge ahead, putting severe stress on the natural environment, a new report from the United Nations Environment Programme (Unep) has warned.
The organisation has suggested a novel response: bring in the mining companies – often seen as the environmental villains – to sort out the recycling.At present, demand is fulfilled by mining more metals, some of them – such as rare earths – that are in limited supply. Mining in many parts of the world is often carried on regardless of the social and environmental consequences, including child labour, ground, water and air pollution, and the destruction of forests………………………………………..Full Article: Source

Perhaps the most important question for precious metals investors is whether the recent sharp declines in gold, silver, and platinum are a “selling climax” — which will reverse powerfully to the upside and provide strong long-term investment opportunities — or are harbingers of even further weakness to come.
According to my chart analysis, all sorts of red warning flags are flying, regarding the short to intermediate terms for the precious metals and their associated shares………………………………………..Full Article: Source

A week ago I wrote about a potential rebound after capitulation and panic selling in precious metals and the miners. It now appears Goldman Sachs (GS) is covering its short on gold as it rebounds above $1,400.
Meanwhile, many banks have helped confuse and misdirect the investment community out of gold (GLD) and silver (SLV). This was a classic shakeout and bear trap, which may start a major short covering rally………………………………………..Full Article: Source

Morgan Stanley Research cut its 2013 price outlooks for several base metals on Tuesday, citing a soft patch in global growth, which is being exacerbated by extended destocking in China and the growth of new capacity.
It also lowered its outlook for silver and platinum in 2013, having already cut gold on April 16
The firm cut its 2013 aluminum price estimate to 90 cents per pound or $1,987 per tonne from $2,200 per tonne, citing high levels of smelting production in China and LME stocks of the metal………………………………………..Full Article: Source

The only thing that investors have heard recently about the copper market is that there is vast oversupply ahead as evidenced by a buildup in copper warehouse inventories globally.
Inventories at LME (London Metals Exchange) warehouses have risen in excess of 190% since October alone. Inventories are now at levels not seen since 2003 at more than 590,000 tons………………………………………..Full Article: Source

As if the past two month’s 13% decline in copper prices wasn’t enough to signal waning confidence in the metal, analysts have also started to scale back forecasts. The latest blow to copper came on Monday, when senior metals analyst at Goldman Sachs Max Layton cut the three-, six- and 12 -month forecasts, citing resurfacing Chinese growth concerns, technical factors turning bullish and a broader metals selloff that has added pressure on prices.
The forecasts were lowered to $7,500 per tonnes from $8,000 on a three-month basis, to $8,000 from $9,000 for six months and to $7,000 per tonnes from $8,000 for 12 months………………………………………..Full Article: Source

World crude steel production for the 63 countries reporting to the World Steel Association (worldsteel) was 135 million tonnes (Mt) in March 2013, an increase of 1.0% compared to March 2012.
In the first three months of 2013, Asia produced 259.8 Mt of crude steel, an increase of 6.4% over the first quarter of 2012. The EU produced 41.5 Mt of crude steel in the first quarter of 2013, down by -5.4% compared to the same quarter of 2012. North America’s crude steel production in the first three months of 2013 was 29.7 Mt, a decrease of -5.7% compared to the first quarter of 2012………………………………………..Full Article: Source

Fortescue Metals chief executive Nev Power predicts the iron price will hover between $139 and $140 per tonne in the short term because of low iron ore stocks.
Australia’s third largest iron ore miner says the commodity will then trade between $120 to $130 a tonne for the foreseeable future, preventing a repeat of last year’s scare when the iron ore price tanked………………………………………..Full Article: Source

If demand for base metals proves promising – owing to their link to infrastructure and urbanisation – countries hosting base metals, particularly copper, will benefit, states minerals consultant Venmyn Deloitte exploration manager Andrew de Klerk, noting that base metals demand may be stronger than precious metal demand in the near term.
His statement backs up fund management firm Hallgarten & Company principal and mining strategist Chris Ecclestone’s media statement in 2012 that base metals are likely to outpace precious metals in 2013……………………………………..Full Article: Source

A survey by of 49 publicly traded companies accounting for 60% of world gold output, which was conducted by New Jersey’s John Tumazos Very Independent Research, estimates that one-third of gold mines have pretax costs of $1,250 to $1,750 per ounce.
“The selloff from $1,900 in September 2011 to nearly $1,350 on April 15th places prices squarely within the costs of the highest one-third of mines,” wrote long-time gold analyst John Tumazos…………………………………Full Article: Source

One of the criticisms against gold is that it is apparently a cyclical asset. Which asset is not? It is time to see through the current sell-off in gold. Two weeks ago, Bare Talk wrote that investor behaviour is pro-cyclical. It amplifies both booms and busts by buying into rising prices and selling into falling prices. It went without saying that investment recommendations are pro-cyclical too.
Nonetheless, it is good to find vindication before readers forget what they read. The price of gold is down 24% in dollar terms from the peak price of $1,900 per ounce. It is both unsurprising and wrong that epitaphs are being written on gold now………………………………………..Full Article: Source

Sentiment at this year’s CESCO copper week, in which producers, traders, consumers, investors and analysts get together, was bearish with consensus expectations for surpluses over the next couple of years and a downward trajectory for prices.
“We maintain our view that any Q2 rally in copper prices should be shorted,” Barclays said in a report. There were no significant downgrades to any specific mine production expectations for this year although risks of further labour disruptions in Chile are fairly high given it is an election year………………………………………..Full Article: Source

Copper is a key manufacturing input, used in everything from electrical wiring to air conditioning units. The copper price has been stable within a range of $7,300-$8,600 per tonne over the past year. Copper prices are down by 8% since the start of 2013 to around $7,550 per tonne, down 25% from the record high in early 2011.
As the copper industry’s annual gathering in Chile ends we look at what is likely to happen to copper prices over the next few years……………………………………..Full Article: Source

Global apparent steel use will increase by 2.95% to 1,454 Mt in 2013, following growth of 1.2% in 2012, according to World Steel Association. In its Short Range Outlook for Steel in 2013-14, released on Thursday, worldsteel said that demand will grow further by 3.2% in 2014 to reach 1,500 Mt.
The worldsteel Economics Committee met 6-7 April 2013 in Dusseldorf, Germany. Commenting Hans Jürgen Kerkhoff, Chairman of the worldsteel Economics Committee said, “2012 was a challenging year for the steel industry with apparent steel use increasing at the slowest rate since 2009 when demand declined by -6.5%……………………………………..Full Article: Source

Asia-Pacific countries are the best-placed to supply the region’s future commodity demand, but rather than encouraging mining it appears they are making it harder for explorers and producers.
Virtually every key resource-rich nation in the region slipped in annual rankings compiled by the Fraser Institute, a Canadian-based free-market think-tank that surveyed 742 mining companies for its report, released in February. And it’s not just that Asian commodity producers slipped, the results showed that Indonesia was the worst mining jurisdiction, and was joined in the bottom 10 by Vietnam and the Philippines……………………………………..Full Article: Source

Growing negative market sentiment, along with rising warehouse stocks, mine supply and weakening demand, could weigh on copper prices, said a metals consultancy Tuesday.
Copper prices are weaker so far in 2013, and if selling pressure intensifies, Thomson Reuters GFMS said prices could fall to $6,500 a metric ton. However, the firm said it believes the red metal could spend most of the year within its recent broad trading range………………………………………..Full Article: Source

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Copper prices will struggle to make headway this year, weighed down by growing inventories due to a cautious view of demand in China, US economic uncertainty and Europe’s debt crisis, metals consultancy Thomson Reuters GFMS said.
In its annual Copper Survey, the consultancy expects prices to average $7,785 a tonne in 2013, down 2.1 percent from the 2012 average. Copper is likely to trade in a broad range between $7,500 and $8,500 this year, with risk weighted on the downside, and $6,500 could be a potential level of support should selling pressure intensify, the consultancy said………………………………………..Full Article: Source

The U.S. economy is certainly not running at 100% capacity, but one sector that is operating at levels not seen since before the financial crisis is the automotive industry. In March, automotive sales increased substantially to an annualized rate of 15.3 million vehicles per year, compared to 14.1 million vehicles this time last year.
American carmakers contributed with substantial increases, including General Motors Company, reporting a 6.4% year-over-year increase in March, and Ford Motor Company, reporting a 5.7% year-over-year increase in March………………………………………..Full Article: Source

US palladium bar saw the biggest price decline of the day, dropping 3.5 percent on April 5, 2013. The price of Japanese palladium bar was essentially unchanged. Chinese palladium bar saw little change in its price last Friday.
The price of Japanese platinum bar rose 0.9 percent after a two-day drop. US platinum bar finished the day down 0.8 percent. The price of Chinese platinum bar remained essentially flat………………………………………..Full Article: Source

U.S. production of refined copper in 2012 decreased by about 3% from that in 2011, the U.S. Geological Survey observed in a Mineral Industry Survey made public Thursday.
Nevertheless, mine production for the full-year 2012 was at its highest level since 2009, according to the USGS. Copper mining production increases in Arizona, Nevada and New Mexico were partially upset by lower production in Utah, “where production at Kennecott Utah Copper’s Bingham Canyon Mine decreased by 32,000 metric tons.”……………………………………….Full Article: Source

It was a real bear market for steel in March across the globe with both domestic and export demand weak in major producing countries and there are no indications of a major price recovery in April.
In US market, flat steel market was bearish with The Steel Index (TSI) US Mid West (FoB Mill) HR Coil Index up 2.3% to US $618/ton after attaining a high of $622 per ton and declining trend is visible in early April, TSI Monthly Steel Report said. Cold Rolled (CR) coil prices were shaky and remained flat at the end of the month………………………………………..Full Article: Source

Copper rebounded from an eight-month low in New York after a Chilean government official said a strike at a port is curtailing shipments from the country, the world’s biggest producer of the metal.
The strike is restricting exports by 60 percent after Angamos port workers in Chile’s north started protests March 16, Chile Mining Minister Hernan de Solminihac told reporters today in Santiago. Copper also rose as the dollar pared earlier gains, boosting the appeal of commodities as an alternative investment………………………………………..Full Article: Source

South African mining shares, which account for 24% of the country’s stock market weighting, fell to their lowest in almost seven months on Wednesday as commodity prices fell on weak demand prospects.
“Continuous uncertainty around labour issues means that generally‚ sentiment around gold and other metals remains negative,” said Ferdi Heyneke‚ a portfolio manager at Afrifocus. “Gold is not attracting any safe haven status at the moment.” The 19-member FTSE/JSE Africa mining index retreated 2.6% and closed at its weakest level since September last year………………………………………..Full Article: Source

Of my recent contrarian picks, it is worth noting that the only companies that lost substantial money were a couple of commodities companies: Kazakhmys and Vedanta. I have worked out that mining companies are different from other companies.
Because of the highly cyclical, supply and demand led nature of commodity markets, share prices can be extremely volatile. Kazakhmys’ price is a quarter of what it was in 2011. Rio Tinto’s share price is half of what it was a few years ago………………………………………..Full Article: Source

Gold will post its first consecutive quarterly loss since 2001. And since mid-2011 gold has been a money loser. If you’re perplexed by that, keep reading. Even silver – which has been a star performer over the past few years - has followed gold prices lower. Will precious metals rebound?
Mixed Performance: The precious metals market consists of four key metals: gold, silver, platinum, and palladium. Thus far this year, exchange-traded products (ETPs) linked to gold and silver have fallen 5.18% and 7.25% respectively. Conversely, platinum and palladium have outperformed on a relative basis………………………………………..Full Article: Source

Nickel prices in China have not moved up due to more than ample supply with expectations that Nickel Pig Iron (NPI) production would be higher, states a recent analysis by London based Barclays.
However, nickel demand in China has been improving with increased buying from the stainless sector, galvanizing and batteries, the report added………………………………………..Full Article: Source

According to Goldman Sachs, in 2011 China added $1.3 trillion to global growth. This is the equivalent of adding an economy the size of Greece to the global economy every 12.5 weeks or an economy the size of Australia over the course of the year. In 2012, if you look at all four BRIC (Brazil, Russia, India and China) economies combined, they added $2.2 trillion to global growth.
This is the equivalent of one economy the size of Italy — the eighth-largest economy in the world — over the course of the year. I looked at broad economic data in the U.S., the Eurozone and China, such as industrial production, consumer spending and debt-to-GDP ratios, to present a vision of where we are in the economic cycle………………………………………..Full Article: Source

In the era of global slowdown, shareholders of mining companies are demanding more of discipline when it comes to capital expenditure.
This is largely attributed to a change of heart amongst share holders who feel that falling commodity prices may hurt profits of miners. In the same breath, one should add that supply is behaving exactly the same way as one should expect in a subdued price environment………………………………………..Full Article: Source