Commodities Comment Putting silver to good use:: Macquire

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Commodities Comment
Putting silver to good use
Feature article
 The Silver Institute and GFMS have shed some light on quantifying silver
usage from industrial end-use demand sectors like solar cell production and
electronics. While growth in these sectors should be solid in the medium term,
we point out to investors that these factors could easily be swamped by shifts
in holding bullion for investment purposes.

Latest news
 Base metals were up in Tuesday trading, with lead recording the strongest
gain at 2.3%, with no slack in the lead supply chain at present. Platinum
outperformed in the precious metals space, rising 0.9%, with sovereign risks
surrounding production rising following the announcement by the Zimbabwe
government on Indigenisation and Economic Empowerment Legislation.
 Spot FeCr prices are reportedly falling in China. Latest HCFeCr quotes are
reported at 106–108c/lb CIF China, which is ~3% lower than a month ago. We
have also heard reports of aggressive discounting of charge chrome from
headline contract prices in Europe.
 Coal stocks held by power plants in the Central grid have fallen sharply to
9.14mt, according to Xinhua. Coal inventories in Hunan in particular had fallen
to a very low level of only four days of consumption, with power hydroavailability
blamed for the shortfall. Domestic coal prices have held up at
levels seen through the peak winter period, with the QHD price trading at
RMB 775/t for the past few months.
 Chinese policy towards nuclear power has changed, according to the deputy
director of the China Electricity Council (CEC), with plans for new nuclear
capacity likely to be scaled back. New capacity by 2010 is likely to be reduced
by 10GW from the 90GW that the CEC and we were forecasting.
 After a week's lull, US weekly steel output has returned to its upward
trend. The latest release from the American Iron and Steel Institute shows that
crude output rose 1.5% WoW to 86.9mtpa, 14% above November's
nadir. With the latest Platts assessment for US Midwest HRC rising to $975/t,
up 65% from November's lows, confidence in the economic recovery
continues to flow through the sector.
 The US Conference Board's consumer confidence index fell to a three-month
low of 63.4 in March, from a revised reading of 72.0 in February. The decline
was attributed to higher gas and food prices and suggests consumer
spending growth could slow in the coming months.
 Spot FeCr prices are reportedly falling in China. Latest HCFeCr quotes are
reported at 106-108c/lb CIF China, which is ~3% lower than a month
ago. We have also heard reports of aggressive discounting of charge chrome
from headline contract prices in Europe.
 Congestion outside Brazilian iron ore ports has reached yet another all-time
high, with over 15m dwt of ships currently waiting to load (including 18
VLOC's and 50 Capesize vessels). Even despite this unused capacity, freight
rates for bulk carriers remain depressed, highlighting the oversupply in this
market. In contrast, tonnage of vessels waiting to unload outside Chinese
ports has fallen to the lowest level since September.