Energy and Natural Resources Market Notebook (5/24/2010)
Strengths
- The U.S. exported more than 1.04 million metric tons of steel in March, a record high over the last 12 months, according to Steel Business Briefing.
- Strong physical demand for nickel has pushed the premiums for refined nickel in the U.S. to the highest levels in 14 years. The price of nickel for immediate delivery on the London Metal Exchange was recently trading at $1.05 per pound for deliveries to Baltimore warehouses, according to CRU.
Weaknesses
- The price of copper fell briefly below the key $3 per pound level on further concerns over the European sovereign debt crisis and slowing growth in China.
- The price of iron ore fines into China continued their decline, falling another $4.50 per dry metric ton to $158 .00 per dry metric ton, according to Platts. Prices are down 13.2 percent over the last month.
- The price of hard coking coal out of Australia fell $0.50 per tonne to $218 per tonne. Prices are down $7 per tonne in the past week and $12 per tonne since the start of May.
Opportunities
- Chile’s Collahausi copper mine has lifted its force majeure on copper shipments following a subcontractor strike. The mine produces roughly 3.3 percent of global copper supply.
- China completed shipbuilding orders of 18.6 million deadweight tonnage (DWT) in the first quarter, up 95 percent year-over-year, according to statistics released by the Ministry of Industry and Information Technology (MIIT). According to MIIT, China's shipbuilding order backlog totaled 185 million DWT by the end of April.
- India is considering launching debt funds of $5-$11 billion each to help build highways and other large infrastructure projects. The country aims to spend about $500 billion for the five-year period ending March 2012.
- PetroChina, China's largest listed oil firm by capacity plans to invest $60 billion to boost its overseas oil and gas output to 200 million metric tons annually. This is equivalent to around 4 million barrels a day, the company's president told reporters Thursday.
Threats
Spanish trade unions said Friday they were considering more protests after the government approved a tough austerity package in an attempt to calm market concern that Spain could be engulfed by a Greek-style financial crisis.
