India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Comment
Nickel supply uncertainties in 2011
Feature article
We review the uncertainties regarding nickel supply and demand in 2011.
Latest news
Copper hit a new all time record high today as the US dollar weakened but
late in the day, prices sold off following weaker data on US oil inventories.
US aluminium orders (ex-canstock) fell by 7.6% MoM in November 2010, but
remain up YoY – by 7.1%. Over the year to date orders ex-canstock have
risen by 11.7%, while total US aluminium orders are up by 6.1%. The data
highlights that after a period of re-stocking in mid 2010, orders have dropped
away, to be 20-25% below average 1993-2007 levels in November 2010.
November is seasonally a weak month so we are not reading too much into
this data, especially given the recent strength in the US PMI, which points to
further growth (albeit modest) in US aluminium orders into 1H11.
The Wall Street Journal is reporting that Xstrata have settled a CY2011
contract price for thermal coal at US$115/t FOB Australia, up 17.3% YoY.
This should be viewed as a bullish settlement for the producers.
Automakers in China shipped 1.3m passenger cars to dealers in November,
up 29.3% from a year earlier, the official China Association of Automobile
Manufacturers (CAAM) said on Thursday.
Rio Tinto and Ivanhoe Mines have signed a new agreement under which Rio
Tinto will assume direct management of the Oyu Tolgoi copper-gold project
and secure the right to increase its ownership in Ivanhoe to 49% through
provision of a financial package expected to help secure development of the
project by late 2012 (six months ahead of schedule). Should this schedule be
met there is upside to our current Oyu Tolgoi forecasts for 2013 and 2014.
The increase in total capital flagged by Ivanhoe (+US$1.4bn, ~30% higher)
was something we had long expected and was largely already factored into
our valuation work on Oyu Tolgoi.
Port statistics for November show that the rains in Queensland have yet to
significantly impact coal exports from the region. Total coal exports rose 1.8%
MoM to 190mtpa, while met coal rose 4% in the month despite a berth outage
at Hay Point. Meanwhile, Newcastle exports fell 18% MoM due to scheduled
rail maintenance. While exports have yet to be hit, mine output remains under
pressure which has reduced inventory buffers in the supply chain such that
further weather-related issues will start to have an increasing impact. With an
initial hard coal settlement in place, focus has now switched towards a
potential PCI settlement. We reiterate our expectation that the tighter market
will see both PCI and semi-soft coal trade closer to hard coking coal levels,
and will achieve higher percentage increases in the coming quarter.
The latest carbon steel market survey results from The Steel Index show that
50% of US respondents now anticipate improving demand conditions in the
coming three months, up 9% WoW. With the US market continuing to
improve, we expect both steel production and regional prices to move up into
1Q.
No comments:
Post a Comment