Tuesday, May 18, 2010

Materials: Aluminum consumption in China to grow 20%

Materials
· Chile Collahuasi mine nearly back to normal-union – Chile’s Collahuasi mine is almost back to full operations after a subcontractor strike, but the labor tensions continue to cause worry that protests could spread to other mines. Reuters
· LME copper bounces back after sell-off – Copper rose over 2% as investors tried to buy the dip following Monday’s slide, but technicals suggest continued weakness and sentiment on fundamentals remained weak. Investors continue to worry that contagion in the Euro zone and that growth in China may have peaked. Reuters
· Is copper a buy or a sell? – Analysts pushing for a further drop in copper say the market’s loss of China and Europe, two key areas of support, could send prices below $2 a pound, a level not seen since the depth of the recent recession. Analysts looking for a rise in copper think the market is oversold and could see a rebound on physical demand below $2.60 a pound. Mineweb http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=104994&sn=Detail
· Aluminum consumption in China to grow 20%, CBI China predicts – CBI China says aluminum consumption could rise 20% as the economy extends its recovery. The comments were similar to those from RUSAL, the world’s largest maker of aluminum. Bloomberg
· Copper, zinc slump may deepen on China share drop – Copper, aluminum, and zinc could extend their slide, tracking a bear-market signal from China’s stocks as the country looks to curb rising property prices. Also, as the country enters the summer, a seasonal lull for metals demand could weigh on commodities. Bloomberg
· Australia tax to cut mine profits - Moody's – Moody’s estimates that Aussie miners could see earnings fall by nearly 1/3 if the proposed mining tax is implemented. Reuters
· Iron ore swap volumes to double by year-end, says Credit Suisse – Credit Suisses expects to double its iron ore swaps business due to the ending of the traditional benchmark pricing system. The increase in liquidity is giving smaller miners the opportunity to lock in prices and gain financing from banks. Mineweb  
· Norilsk beats forecasts after cost cuts – Norilsk posted a profit in 2009 which beat estimates as cost cutting and reduced one-off charges offset lower metals prices. XE.com http://www.xe.com/news/2010-05-18%2004:13:00.0/1152149.htm?c=1&t=
· Nippon Steel,Ternium agree Mexico steel JV- Ternium and Nippon Steel have signed an agreement to create a JV in Mexico to produce galvanized steel sheets for the Mexican automobile market. Marketwatch.com  
· Barrick COO says focused on internal growth – Barrick Gold’s CEO said the company is focused more on internal growth but will remain on the lookout for potential acquisitions. The company expects gold prices to stay over $1,200 “for the foreseeable future.” Mineweb
Corn demand in South Korea to rise after sugar surge – Corn could rise as much as 6% as a rise in sugar prices spurred a shift to corn as a sweetener. Bloomberg
· Potash reports April producer ending inventories – North American producers’ potash ending inventory is up 8K tons MoM and 18% below the 5-year average. DAP ending inventory is down 77K tons MoM and 32% below the 5-year average. Bloomberg
· Nalco releases sales impact of Gulf response – NLC said its efforts to meet Gulf oil spill requests for dispersants will have created about $40M in sales by the end of this week, approximately 1% of 2010 revenues. Reuters
· VAL upgraded to OW from N at JP Morgan.

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