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Commodities Comment
Booming Chinese stainless steel
production supports nickel
Feature article
Latest stainless steel data for 2010, which include substantial upward
revisions to Chinese production, suggest an ongoing nickel market deficit in
2011, despite ongoing substitution to lower- and no-nickel-containing stainless
steels.
Latest news
The continued strength in steel market sentiment is noted in the latest survey
by The Steel Index. 61% of companies now expect higher demand in the
coming three months, up 9% WoW, while 81% expect higher prices over this
timeframe. Meanwhile, the latest US weekly crude steel output reported by
the AISI is back to levels last seen in June, at 83.3mtpa, representing a
capacity utilisation rate of 73%.
The TEX Report has noted that Teck has yet to reach agreement with the
United Steelworkers union over a new labour agreement at the 5mtpa Elkview
hard coking coal mine. The majority of staff voted for strike action in a ballot,
but there has yet to be notice given of any dates. With negotiations ongoing,
we expect a compromise to be reached however any disruption presents
further risk to the already undersupplied met coal market.
The latest World Steel Dynamics SteelBenchmarker assessment has shown
another price surge over the past fortnight. European prices led the way, with
both hot-rolled and cold-rolled coil jumping over US$50/t, representing a 7%
rise. US domestic prices also continued their momentum, with HRC rising
5.7% to US$851/t, the highest seen since October 2008. This represents a
phenomenal US$250/t rise (42%) since the early-November assessment for
US material. The benchmark World Export HRC price also rose 5.7% over
the fortnight, and we would expect further (if less vertical) rises in the coming
weeks as steel production growth struggles to match rising real demand as
key Northern Hemisphere regions emerge from winter.
Western world unwrought aluminium stocks increased by 7% MoM to 1.34m
in December, according to the IAI. However, the total was still 45% lower
than in the corresponding month a year earlier.
ITRI has published its latest annual survey of the tin market. It estimates that
tin use increased by 12.5% YoY to 360,300t in 2010, although this was still
3% short of its peak of almost 373,000t in 2007, of which about 80% was
produced from primary sources. China's tin use reached a new record of
147,000t, accounting for 41% of the world total. Production of solder alloys
was the single largest end use market for tin, accounting for 54% of the total,
followed by tinplate (16%) and tin chemicals (14%). The LME tin price
appears to be on track to test new record highs (in nominal terms) of
US$30,000/t, supported by strong demand and perceptions of supply-side
shortfalls, in particular in Indonesia. However, we are inclined to think that the
price is now becoming overstretched from the fundamentals that underpinned
its previous record-breaking run in the second half of 2010.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Commodities Comment
Booming Chinese stainless steel
production supports nickel
Feature article
Latest stainless steel data for 2010, which include substantial upward
revisions to Chinese production, suggest an ongoing nickel market deficit in
2011, despite ongoing substitution to lower- and no-nickel-containing stainless
steels.
Latest news
The continued strength in steel market sentiment is noted in the latest survey
by The Steel Index. 61% of companies now expect higher demand in the
coming three months, up 9% WoW, while 81% expect higher prices over this
timeframe. Meanwhile, the latest US weekly crude steel output reported by
the AISI is back to levels last seen in June, at 83.3mtpa, representing a
capacity utilisation rate of 73%.
The TEX Report has noted that Teck has yet to reach agreement with the
United Steelworkers union over a new labour agreement at the 5mtpa Elkview
hard coking coal mine. The majority of staff voted for strike action in a ballot,
but there has yet to be notice given of any dates. With negotiations ongoing,
we expect a compromise to be reached however any disruption presents
further risk to the already undersupplied met coal market.
The latest World Steel Dynamics SteelBenchmarker assessment has shown
another price surge over the past fortnight. European prices led the way, with
both hot-rolled and cold-rolled coil jumping over US$50/t, representing a 7%
rise. US domestic prices also continued their momentum, with HRC rising
5.7% to US$851/t, the highest seen since October 2008. This represents a
phenomenal US$250/t rise (42%) since the early-November assessment for
US material. The benchmark World Export HRC price also rose 5.7% over
the fortnight, and we would expect further (if less vertical) rises in the coming
weeks as steel production growth struggles to match rising real demand as
key Northern Hemisphere regions emerge from winter.
Western world unwrought aluminium stocks increased by 7% MoM to 1.34m
in December, according to the IAI. However, the total was still 45% lower
than in the corresponding month a year earlier.
ITRI has published its latest annual survey of the tin market. It estimates that
tin use increased by 12.5% YoY to 360,300t in 2010, although this was still
3% short of its peak of almost 373,000t in 2007, of which about 80% was
produced from primary sources. China's tin use reached a new record of
147,000t, accounting for 41% of the world total. Production of solder alloys
was the single largest end use market for tin, accounting for 54% of the total,
followed by tinplate (16%) and tin chemicals (14%). The LME tin price
appears to be on track to test new record highs (in nominal terms) of
US$30,000/t, supported by strong demand and perceptions of supply-side
shortfalls, in particular in Indonesia. However, we are inclined to think that the
price is now becoming overstretched from the fundamentals that underpinned
its previous record-breaking run in the second half of 2010.
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