LME INVENTORY DATA 26-9-2007

Copper -325
Aluminium +7600
Nickel +780
Zinc -200
Lead Unchanged
Tin +815

LME Warehouse Stock 25/09/2007

Copper -500
Aluminium +4700
Zinc -1225
Lead -200
Nickel +294
Tin +75

LME Warehouse Stock Movements (20/109/2007)

Copper - 500
Aluminium +3150
Nickel + 24
Zinc - 1300
Lead -250
Tin -10

LME Warehouse Stock Movements (18/09/2007)

Copper -525
Aluminium +5300
Nickel -6
Zinc -1275
Lead -575

LME INVENTORY DATA

Copper -2000
Aluminium +6150
Nickel +774
Zinc -1500
Lead -675
Tin +355

LME INVENTORIES

copper +650
zinc -575
aluminium +6000
nickel +498
lead -125
tin -25

Gold prices likely to gain further
Near-term outlook for nickel remains weak
G. Chandrashekhar
Mumbai, Aug. 5 Gold could not sustain the pressure of broad sell-off that characterised the equities and commodities markets last week. Investors pulled out from most markets.
The status of gold as a safe haven investment thus took a hit. The yellow metal tracked the dollar. How soon will investors return to gold is a question everyone is asking. Positive sentiment
In the somewhat murky scenario comes news of increased inflow of gold into ‘streetTRACKS’ gold ETF last month. Gold held in trust rose by 32 tonnes over the month. Total holdings have reached a record 506 tonnes. This is broadly interpreted as positive sentiment towards the yellow metal.
The generally supportive factors such as dollar weakness, firm crude prices, stabilising fabrication demand and geopolitical situation continue to operate. However, slowdown in de-hedging and European Central Bank sales may dampen the sentiment.
According to technical analysts, in the short-term, in the absence of a break below trendline support near $660, signs are increasingly turning bullish. Momentum is pushing higher and the risk is for further gains into the next few days ($680 and trendline resistance at $686). In the medium-term, higher highs are expected. Therefore, strategic buying at every dip may be advisable.Base metals
Concerns on the wider financial markets impacted base metals complex too, which showed mixed performance. Specifically, nickel prices fell below the psychologically important $30,000 a tonne level, reaching an 8-month low.
LME nickel stocks are at their highest level in over a year. Recent news of cutbacks by stainless steel mills has weighed on prices and sentiment.
The near-term outlook for prices continues to remain weak in the light of easing fundamentals and a further downside risk is not ruled out. However, in the medium-term, the market has the potential to rise.
By the fourth quarter of 2007 when de-stocking of stainless steel is expected to be over, nickel prices may rebound.Tin prospects
Lead prices have continued to climb higher. LME stocks have been drawndown. The metal has an upside risk in the light of market’s compelling fundamentals.
Tin prices too are ruling firm (around $16,000/t). Continuing to rise, LME tin stocks now total 14,200 tonnes, the highest level since December 2006. However, a combination of positive sentiment, drawdowns in unreported stocks and tightness in the tin concentrate market bodes well for prices which may push higher, experts assert.
Copper prices continue to be supported by ongoing strike and the concomitant potential for supply disruption.
Technical analysts see the market topping and expect weakness to set in. Near-term support below $7660 is placed at $7532. In the medium-term, the market is expected to retest and likely exceed 2006 peak.Crude
Concerns over future supply availability abound.
Speculation over future OPEC conduct is proving an important sentiment setter at the moment, analysts assert.

Copper + 1400
Aluminium - 1075
Nickel +126
Zinc - 950
Tin + 240
Lead - 450

Copper + 1400
Aluminium - 1075
Nickel +126
Zinc - 950
Tin + 240
Lead - 450

Copper -775
Aluminium + 225
Zinc + 950
Nickel + 300
Tin +180
Lead - 725
Aluminium Alloy - 220
NAASAC + 100

copper down 1500 tonnes
aluminium up 11,950 tonnes
lead up 575 tonnes
nickel down 192 tonnes
zinc down 650 tonnes
tin down 45 tonnes

Euroshares open lower on Chinese rate hike fears; miners, insurers fall LONDON - Leading European exchanges moved lower in opening deals as fears of a rate hike in China hit global markets with mining and insurance stocks feeling the brunt of the selling pressure, dealers said. At 08.51, the STOXX 50 was down 40.94 points at 3,811.95 and the STOXX 600 was down 4.46 points at 381.41 In Asia, China-related stocks led the fall on fears that the mainland's A-share markets may be in for a big correction adding to speculation of a further rate hike. The Hang Seng Index ended the morning down 404.71 points or 1.95 pct at 20,372.38, off a low of 20,334.15 and high of 20,634.90. The Nikkei closed down 295.36 points at 17,371.97. Mining stocks underperformed as China's gross domestic product (GDP) growth continued to accelerate, despite tightening measures taken by Beijing and suggesting a further rate hike is inevitable. The China concerns caused panic selling of copper plays, dealers said, amid fears that any slowdown in China's growth will impact on commodity prices. Base metals prices eased in response, with gold futures over 3 usd lower at 690.2 an ounce in Asian trade, and both silver and copper prices also on the back foot. Xstrata and Anglo American shares fell 2.66 pct and 2.7 pct respectively. Rio Tinto was also dragged down by its first quarter production update which showed lower iron ore output in a first quarter, prompting Merrill Lynch to repeat its 'neutral' stance. Rio Tinto said iron ore output in the first quarter of its December year from its Hamersley mines in the Pilbara totaled 23.9 mln metric tons, up 17 pct on the same quarter a year earlier but down 3 pct on the December quarter. Output at the majority-owned Robe River joint venture in the same region totaled 6.5 mln tons, up 8.0 pct on a year earlier but down 12 pct on the December quarter. Among financials, Axa fell 2.44 pct, Allianz fell 1.95 pct as selling pressure on the global markets weighed. Prudential outperformed, though, down only 0.07 pct as the life insurer reported better-than-expected first-quarter sales, with a strong performance in Asia offsetting a continued downturn at its UK division. Prudential, the UK's second-biggest insurer, said total sales for the three months to March 31 2007 came in at 640 mln stg on an annual premium equivalent basis, up 8 pct compared with the same period last year at constant exchange rates. Analysts had expected sales of 613 mln stg, according to a consensus forecast supplied by the company. Converium Holding AG was down 0.23 pct as it reported a first-quarter net profit of 150.9 mln usd, up from 61.6 mln last year, boosted by a tax valuation allowance of 85 mln usd

LONDON (Thomson Financial) - Oil prices found no clear direction after a mixed picture of US energy stocks emerged from the latest weekly snapshot reported by the Energy Information Administration. While headline figures showed a sharper than expected fall, there were offsetting gains in US gasoline production and imports in US weekly stocks data just out. Gasoline is the most important indicator ahead of the peak demand US driving season which starts at the end of May. At 4.54 pm, London Brent crude for June delivery was down 37 cents at 65.56 usd a barrel. Meanwhile, New York crude for May delivery was down 17 cents at 62.93 usd a barrel. New York May contracts will expire on Friday. The Energy Information Administration said gasoline stocks fell by 2.7 mln barrels in the week to March 13, against an expected drop of 1.66 mln barrels. Crude oil inventories also surprised the market, falling by 1 mln barrels against an expected rise of 890,000 barrels. Meanwhile, gasoline production was up 133,000 bpd and that imports were up 86,000 bpd. Citigroup analyst, Tim Evans said the data had a bit of everything. "The crude stock decline was supportive," he said, adding however that "market focus here is on rising supplies." Gasoline demand was down 2.4 pct from the week before but up 2.6 pct compared with last year. Distillates, which include heating oil were down 800,000 barrels, largely in line with a predicted 512,000-barrel fall. Man Financial analyst Edward Meir said prices may have dipped after the data was released as a rise in refinery runs was also reported, signalling higher supplies. "But, its still early, and we could end up higher," he said. Utilisation rates increased by 2 pct to 90.4 pct last week, against an expected rise of just 0.33 pct. "Higher utilisation rates, coupled with increasing imports, should serve to balance the product market," said analysts at Credit Suisse. Increased utilisation rates also show refiners are successfully coming to the end of the maintenance period, which lasts from late January to April. Elsewhere, traders kept a close eye on developments in Nigeria, the world's eighth largest oil exporter, ahead of presidential elections this weekend. Last week at least 21 people were killed during the initial state elections. "The countrys propensity for violence should increase over the next few weeks ahead of very controversial elections," said Meir of Man Financial. "We would not be surprised to see majors like Royal Dutch Shell being cautious about announcing any type of restarts, knowing full well that the country is entering yet another dangerous period just ahead." Shell traders said the company was expected to restart its Forcados crude oil stream in Nigeria's Niger Delta after being shut a year ago following militant attacks. However, the company declined to comment officially. The news "has weighed more on UK Brent, since it is more closely tied to flows from West Africa," commented Nas Nijjar,

Oil up ahead of US data expected to show tight gasoline inventories LONDON (Thomson Financial) - Oil was up ahead of weekly US data which will show gasoline inventories fell again last week, said analysts, sparking supply fears before the peak demand US driving season starts. The data will be released at 3.30 pm BST by the US Energy Information Administration. Market players are calling for a 1.66 mln barrel fall in gasoline stocks in the week to March 13. Crude stocks are thought to have risen by 890,000 barrels, while distillates, which include heating oil, will have dropped by 612,500 barrels, showed a Thomson Financial News survey. At 9.22 am, London Brent crude for June delivery was up 22 cents at 66.15 usd a barrel. Meanwhile, New York crude for May delivery was up 22 cents at 63.32 usd a barrel. New York May contracts will expire on Friday. Stronger prices are set to remain until gasoline stocks start to rise, at which point market psychology will begin to change, said Man Financial analyst, Edward Meir. Elsewhere, traders were still keeping a close eye on developments in Nigeria ahead of presidential elections this weekend. "The countrys propensity for violence should increase over the next few weeks ahead of very controversial elections," said Meir. "We would not be surprised to see majors like Royal Dutch Shell being cautious about announcing any type of restarts, knowing full well that the country is entering yet another dangerous period just ahead." Shell traders said the company was expected to restart its Forcados crude oil stream in Nigeria's Niger Delta after being shut a year ago. However, the company declined to comment officially.

copper down 300 tonnes
lead up 150 tonnes
nickel up 438 tonnes
aluminium up 775 tonnes
tin unch
zinc down 625 tonnes

Global Gold Production on the DeclineBy Jon A. Nones08 Mar 2007 at 12:39 PM GMT-05:00St. LOUIS (ResourceInvestor.com) -- Yesterday, South Africa's Chamberof Mines reported that gold output fell last year to 275 tonnes, down8% from 2005. Some sources say South Africa's decline in goldproduction is now becoming a global affair, as seen in leading goldproducing countries.According to stats from GoldSheets.com, U.S. gold output for lastyear declined from 262 tonnes to 260 tonnes. Australian productionfell to 251 tonnes from 263 tonnes. Gold produced in Peru declined to203 tonnes from 207 tonnes. Russian gold output dropped 4 tonnes in2006 to152 tonnes, while Canada fell from 118 tonnes to 104 tonnes."Production in Australia, South Africa, Canada and Peru is expectedto continue slumping in the next few years, probably stabilizing in2010, but never reaching their peak levels from years past," saidNeal R. Ryan, Vice President and Director of Economic Research forBlanchard and Company, Inc.Ryan said global production for gold peaked in 2001 at 2,604 tonnesor 83.7 million ounces. With 2006 production expected to come in at2,467 tonnes, annual gold mining supply will have fallen 4.4 millionounces in five years. Since 2001, prices have almost tripled from$260/oz to $650/oz."So much for supply/demand economists that always say higher pricesequal more production," added Ryan.However, Dennis Gartman, editor of the Gartman Letter, said lastyear's decline in gold production was the very logical result of highand rising gold prices. As gold moved higher, lower grades of goldore are mined, he said."The Chamber of Mines in South Africa said that its members reporteda 1.5% increase in tonnes of ore mined, but also reported a 9.3%decrease in the average grade mined," he added.Further still, the Chamber noted that the cost of mining gold rose bysubstantially more than inflation, with the total production cost ofmining a kilogram of gold, before capital expenditure, rising 11.9%year-on-year."Mining gold is not an inexpensive venture! Thankfully, it is a bullmarket," said Gartman.China actually expanded production from 224 tonnes in 2005 to 240tonnes last year, according to GFMS."Chinese mine production is ramping up fairly quickly, but that toohas only so much it can increase, while the other major producingcountries continue their downdraft," said Ryan.Source: GoldSheets.comGlobal annual supply is generally considered to be about 100 millionounces, according to stats from the World Gold Council."So just from mine production, we're talking about 4.4% decrease insupply ... add the potential of central bank sales being 6-8 millionounces short this year," Ryan added.Last year, central banks consistent with the Central Bank GoldAgreement (CBGA) of 27 September 2004 ended the year well under the500-tonne quota. Although sources differ on how much was sold, RI hasit at about 370 tonnes.So far this year, CBGA banks have sold about 110 tonnes. At thecurrent rate of sales of about 22 tonnes per month, central banks areon pace to end the year around 230 tonnes short of the 500-tonnequota, and would have to sell about 55 tonnes per month here on outto make up the difference.Ryan said there is potential central bank purchases around 2-3million ounces, should current Russian bank and other third tier bankbuying continue.He said, "we're looking at a combined impact of 12-15 million ouncesof supply being reduced from the market, 12%-15%."Gold futures are currently up $1.10 at $654/oz in New York.

SEOUL (Reuters) - Oil prices rebounded to $58 on Thursday after fuel stocks in the United States were cut by freezing weather and as buyers reemerged following a 2 percent sell-off the previous day.
U.S. crude oil futures gained 27 cents to $57.98 a barrel by 0659 GMT -- after hitting an intraday high of $58.11 -- recovering from a $1.17-fall on Wednesday. London Brent crude was up 39 cents to $57.62.
Analysts say the drop in inventory levels was not significant enough to push up oil prices beyond $60, leading to profit-taking after a nearly 20 percent climb since mid-January. The market was still supported by cold weather in the major heating oil consuming regions of the U.S. Midwest and Northeast, which cut distillate fuel stocks by 3.7 million barrels last week, the biggest distillate decline since October.
"The drop was larger-than-expected but it wasn't enough to move up prices as there is a psychological resistance against the $60-level," said J.J. Kim, analyst at Korea Investment and Securities.
Prices have recovered from a dip below $50 in mid-January as unusually warm winter weather turned into a cold spell hitting the key heating oil markets in the world's top oil consumer.
U.S. crude supplies fell by 400,000 barrels, against a forecast rise of 1.4 million barrels, while gasoline rose by an unexpected 2.6 million barrels, the data showed.

LONDON (Reuters) - Copper prices slipped on Wednesday as a rise in stocks reignited worries about a surplus this year, while tin prices fell on expectations of rising supplies and nickel was hit by profit taking, traders said.
Three-month copper on the London Metal Exchange was untraded in official rings, but was quoted down at $5,380/5,381 a tonne from Tuesday's $5,475 close.
Copper prices are down around 15 percent since the beginning of the year on expectations that demand would slow alongside global economic growth, with the market moving into a surplus of around 200,000 tonnes.
Prices are down nearly 40 percent since copper hit a record high of $8,800 last May.
"The second half of 2005 and the first half of 2006 in particular was a period of very strong, synchronised world growth," said David Thurtell, analyst at BNP Paribas.
"That is not going to happen this year. Chances of supply disruptions are lower and there is an expansion of capacity."
Stocks of copper in LME warehouses rose 3,175 tonnes to 215,750 tonnes on Wednesday. They have doubled in the past 12 months and are about eight times higher than in July 2005.
Copper fell to 10-month lows of $5,250 last Friday after the Wall Street Journal reported $1.5 billion hedge fund Red Kite had lost 20 percent and wanted to extend the redemption notice period for investors to 45 days from 15.
Traders said the sell-off was triggered by worries that Red Kite would have to sell its holdings of copper and other metals to meet redemptions.
SUBSTITUTION
Aluminium traded at $2,655 a tonne from $2,712. Earlier it hit $2,639.75, matching the January 17 low.
Market focus had been on the maturity of options to buy and sell three-month aluminium futures at between $2,750 and $2,800.
Traders said offers at $2,710 had kept a lid on prices and the expiry had passed without any fireworks.
"It failed to get through $2,710 and we saw a sell-off after that," a LME trader said. "It then broke through support at $2,690 and hasn't looked back since."
Aluminium trading has been lacklustre in recent days and dealers expect fund selling will cap prices over coming days.
"Funds are betting that the aluminium surplus in China find its way to other countries," the trader said.
Nickel was bid at $35,350 from $35,800 on Tuesday.
Stocks at around 3,000 tonnes, the lowest since 1991, and expectations of continuing strong demand pushed nickel prices up to a record high of $38,950 on January 26.
Since then profit-taking and talk of substitution in the steel industry has sobered up the market.
"The issue of nickel substitution by stainless steel mills which comprise the major end-user demand sector for nickel is a key factor for future price direction," Barclays Capital said in a research note.
Tin was untraded, but bid lower at $11,775 a tonne from $11,925.
Sentiment was weighed by news that Indonesia, the world's second-largest tin producer, had allowed five small smelters to resume refined tin production after a recent crackdown on unregulated mining.
Shares in London-listed BHP Billiton were up more than four percent after the company posted a 41 percent jump in first-half profits and set aside $10 billion for share buybacks.
Zinc traded down at $3,120 from $3,220 on Tuesday and lead at $1,550 from $1,570.

Markets mixed after US economic figures released
There has been another flurry of economic figures in the United States, with the consumer price measure of inflation recording its biggest rise in eight months.
The CPI was up 0.5 per cent in December.
There has also been an unexpected rise in US housing starts and a report by the Philadelphia Federal Reserve is pointing to a surprisingly sharp increase in factory activity in the US mid-Atlantic region.
Shares in IBM have weighed on the overall market, with investors selling out ahead of the company's profit results expected after the close of trade.
On the New York Stock Exchange, the Dow Jones industrial average has closed down nine points at 12,568.
Technology stocks have come under further selling pressure after disappointing forecasts issued by computer maker Apple and Lam Research Corporation.
The high-tech Nasdaq composite index is 36 points lower at 2,443, a slide of 1.5 per cent.
The British market has managed a small recovery, with London's FT-100 index recouping just six points to 6,210.
Yesterday the Australian share market resumed its upward march, with the All Ordinaries index putting on 25 points to end at 5,651.
The resource and banking sectors were the mainstays.
BHP Billiton shares regained 22 cents to $24.74 and Woodside Petroleum jumped 90 cents to $36.60 after announcing record production and sales figures for 2006.
Overnight on the Sydney Futures Exchange, the Share Price Index 200 contract has closed down eight points at 5,635.
The 10-year bond contract is up 0.5 at 94.13, with the implied yield easing to 5.87 per cent.
On foreign exchange markets, the US dollar has remained close to four-year highs against the Japanese yen after the Bank of Japan decided to hold interest rates unchanged.
The Australian dollar has edged ahead overnight. At 7am AEDT it was being quoted at 78.85 US cents, up one-tenth of a cent on yesterday's local close.
On the cross currencies it was at 60.88 euros, 95.59 Japanese yen, 39.95 pence Sterling and against the New Zealand dollar it was at 1.133.
The gold price has eased to $US627.80 an ounce.
Oil prices have fallen sharply after US inventory data showed a big rise in stockpiles of crude and oil futures in New York have been to 20 month lows.
The spot price of West Texas crude has dropped $1.79 to $US50.51 a barrel.

Copper prices spiral down
by Antony Barton
Copper fell to its lowest price for nine months in early January.It traded at $5,625 (£2,884) a tonne earlier this month, the lowest since April, and suffered a 10 per cent slide within three days. The price was around 36 per cent down from its $8,800 (£4,560) high in May last year but almost triple its price four years ago (News, 11 May 2006).Car production, power grids and construction pushed up copper prices fivefold between 2001 and the end of 2006. Asian countries, which relied on the metal for building projects, were central to driving up the price.Andrew Cole, senior base metals analyst at Metal Bulletin Research, told SM he was not surprised that copper had fallen, but by how far: "It is a combination of weak demand from the US due to the housing slowdown, Chinese consumers playing a waiting game and investors repositioning themselves with a less bullish stance towards this market's prospects."He added the Chinese were likely to buy with vigour over the next few weeks to replace supplies after the government stockpiling agency and manufacturers de-stocked heavily last year.The speed at which copper prices fell was far slower than the speed with which they rose and Cole said copper could soon reach a more familiar price. When asked whether other metals would follow the same trend, he said each was following its own. Aluminium is in strong demand but production is surging, especially from China, pointing to a drag on price through surplus in 2007. Tin prices, which also fell this month, depend on how the Indonesian government's crackdown on the tin smelting industry impacts on its supply. The situation will be easier to determine over the next month.Oil also fell sharply this month, with prices in New York and London falling to below $56 (£29) a barrel for the first time since 2005

Encore buys 20 million barrels of oil reserves
By DAN PILLER
STAR-TELEGRAM STAFF WRITER
FORT WORTH - Encore Acquisition Co. of Fort Worth said Wednesday that it has bought about 20 million barrels of oil reserves in the Big Horn Basin of Wyoming for $400 million from Anadarko Petroleum of Houston.
Encore said the properties have an estimated life of about 14 years and will require about $17 million to develop from their current daily production of about 4,000 barrels of oil from 614 wells.
The deal is expected to close by the end of the first quarter and includes a gas-processing plant and an oil and natural gas pipeline gathering system.
Encore President Jon Brumley said the company believes that the properties will generate about $50 million in cash flow this year and next. "These properties can produce with a relatively modest $7 million annual investment, and the remaining $43 million is available to grow production or reduce debt," Brumley said.
Shares of Encore (ticker: EAC) closed at $23.42, up $1, in trading Wednesday on the New York Stock Exchange.
Encore, organized in 1998, is primarily an oil producer in older fields of North Dakota and West Texas
The sale by Anadarko is part of that company's strategy announced late last year to divest several major properties in Texas, Louisiana, Wyoming and the Gulf of Mexico to raise up to $9 billion to reduce debt incurred in its $22.5 billion purchase last year of Kerr-McGee Corp. and Western Gas Resources.
Anadarko has sold its Canadian subsidiary for $4.24 billion and is looking for a buyer for its once-thriving Giddings Field in South-Central Texas, which was developed by Union Pacific Resources Group of Fort Worth.
Anadarko bought Union Pacific Resources in 2000 for $8.2 billion.