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China’s latest commodities output and
trade data strongly suggest destocking
Feature article
We summarize May trade and production data and create apparent
consumption estimates. The key data show weak apparent demand in 2011,
relative to growth in end-use indicators, pointing to a significant destocking
cycle in this year to date in response to tighter credit conditions.
Latest news
Most LME base metals prices rose on Wednesday, with the Euro stable as a
vote of confidence in the Greek government cleared a hurdle for fresh
emergency funding. Lead recorded the strongest gain of 3.4 on a further sharp
rise of 21,475t in LME cancelled lead warrants in Singapore on Tuesday.
Total cancelled lead tonnage from all LME warehouse locations of lead now
stands at an all time record of 35,725t, equal to 11% of total stocks, which is
the highest proportion recorded in the last two and a half years. However, we
continue to think that this spike in cancellations is driven more by plans to
reshuffle where stocks are held than by any new upturn in end-user lead
demand.
The FOMC announced no change to its current monetary policy strategy. The
current weakness in the US continues to be seen as influenced by temporary
factors, although the economic projections showed a downward revision to
growth for both 2011 and 2012. In other economic news, the AIA Architecture
Billings Index slipped to 47.2 May, suggesting that the positive momentum in
confidence in non-residential activity in the US has faded in recent months.
At the Steel Success Strategies conference in New York, the US steel market
panel focused on the dramatic need for infrastructure investment in the country.
Gerdau noted that the American Society of Civil Engineers estimates $2.2tr of
spend is required over the next five years but only half of this has been
currently budgeted for.
The latest data from the New Caledonian government (Dimenc) on nickel
production show that Vale continues to struggle with its new HPAL nickel plant
(formerly known as Goro). Over January to May, production of intermediate
product (being sold to QNI in Australia) was 3,028t nickel contained with
May production being only 151t. Vale is planning to commission one of its
three lines through to refining in 3Q 2011. Meanwhile, total New Caledonian
nickel mine production fell 20.3% YoY in January to May to 39.8kt nickel
contained and exports of nickel ore on a metal contained basis were down
10.2% YoY. Of note, exports of ore to Korea (to the Posco/SMSP ferronickel
plant) were down 31% YoY to only 6,313t contained nickel.
Dubai Electricity and Water Authority (DEWA) has announced it plans to
double the size new coal-fired generation. DEWA had planned to build a
1.5GW plant, but is now undertaking a feasibility study to look at increasing
that to 3GW to boost capacity to meet rising electricity consumption.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
China’s latest commodities output and
trade data strongly suggest destocking
Feature article
We summarize May trade and production data and create apparent
consumption estimates. The key data show weak apparent demand in 2011,
relative to growth in end-use indicators, pointing to a significant destocking
cycle in this year to date in response to tighter credit conditions.
Latest news
Most LME base metals prices rose on Wednesday, with the Euro stable as a
vote of confidence in the Greek government cleared a hurdle for fresh
emergency funding. Lead recorded the strongest gain of 3.4 on a further sharp
rise of 21,475t in LME cancelled lead warrants in Singapore on Tuesday.
Total cancelled lead tonnage from all LME warehouse locations of lead now
stands at an all time record of 35,725t, equal to 11% of total stocks, which is
the highest proportion recorded in the last two and a half years. However, we
continue to think that this spike in cancellations is driven more by plans to
reshuffle where stocks are held than by any new upturn in end-user lead
demand.
The FOMC announced no change to its current monetary policy strategy. The
current weakness in the US continues to be seen as influenced by temporary
factors, although the economic projections showed a downward revision to
growth for both 2011 and 2012. In other economic news, the AIA Architecture
Billings Index slipped to 47.2 May, suggesting that the positive momentum in
confidence in non-residential activity in the US has faded in recent months.
At the Steel Success Strategies conference in New York, the US steel market
panel focused on the dramatic need for infrastructure investment in the country.
Gerdau noted that the American Society of Civil Engineers estimates $2.2tr of
spend is required over the next five years but only half of this has been
currently budgeted for.
The latest data from the New Caledonian government (Dimenc) on nickel
production show that Vale continues to struggle with its new HPAL nickel plant
(formerly known as Goro). Over January to May, production of intermediate
product (being sold to QNI in Australia) was 3,028t nickel contained with
May production being only 151t. Vale is planning to commission one of its
three lines through to refining in 3Q 2011. Meanwhile, total New Caledonian
nickel mine production fell 20.3% YoY in January to May to 39.8kt nickel
contained and exports of nickel ore on a metal contained basis were down
10.2% YoY. Of note, exports of ore to Korea (to the Posco/SMSP ferronickel
plant) were down 31% YoY to only 6,313t contained nickel.
Dubai Electricity and Water Authority (DEWA) has announced it plans to
double the size new coal-fired generation. DEWA had planned to build a
1.5GW plant, but is now undertaking a feasibility study to look at increasing
that to 3GW to boost capacity to meet rising electricity consumption.
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