Commodities Fall for Second Day on European Bailout Concerns, Dollar Rally (Source: Bloomberg)
Commodities fell for the second straight session on concern that European leaders will struggle to contain the region’s debt crisis, eroding prospects for the global economy and raw-material demand. The Standard & Poor’s GSCI index of 24 energy, metal and agriculture prices fell 0.7 percent to 647.96 at 3:49 p.m. in New York. Coffee, silver and wheat led the decline. The dollar jumped the most since 2008 against a basket of major currencies, eroding the appeal of commodities and the outlook for U.S. exports. The MSCI All-Country World Index of equities fell 2.8 percent, the most in five weeks. European leaders last week pledged to increase the region’s rescue fund to 1 trillion euros ($1.4 trillion). Officials will meet early next month to seek financial support for the accord. The lack of details in the European plan disappointed investors, said Matthew Zeman, a strategist at Kingsview Financial in Chicago.
Hedge Funds’ Bullish Bets Driving Biggest Rally in 10 Months: Commodities (Source: Bloomberg)
Speculators boosted wagers on higher commodity prices by the most since August as improving prospects for growth in the U.S. and Europe sent prices toward their biggest rally in 10 months. Money managers boosted combined net-long positions across 18 U.S. futures and options by 13 percent to 831,421 contracts in the week ended Oct. 25, Commodity Futures Trading Commission data show. The Standard & Poor’s GSCI Index of 24 raw materials jumped 9.6 percent in October, capping the biggest gain since December. European leaders announced a bailout plan Oct. 27 to help relieve the region’s debt crisis, and the U.S. economy grew by a more-than-expected 2.5 percent in the third quarter. In October, the S&P 500 Index rose 11 percent, the most since 1991. The outlook for demand has recovered since September, when the GSCI fell 12 percent, the most since November 2008, amid concern the global economy was set for another recession.
Corn (Source: CME)
US corn futures end lower on outside market pressures and lackluster demand. A stronger dollar, fueled by Japan's currency intervention, along with renewed worries about Europe's debt crisis, weighed on prices. Another impact was the bankruptcy filing for MF, as the CME would only allow the brokerage's customers to liquidate positions. Meanwhile, export demand has remained weak. Despite all that, the market remains range-bound, and traders say next week's USDA report is likely to cut the size of the projected crop. CBOT December corn finished down 1.2% at $6.47/bushel.
Wheat (Source: CME)
U.S. wheat futures end lower on outside market pressure and liquidation as MF Global customers are forced to the sidelines. A stronger dollar, fueled by Japan's currency intervention, weighed on commodities generally, as did slumping equities, which fell on renewed worries about Europe's debt crisis. Meanwhile, CME forbid customers of troubled MF Global from doing any trades except liquidating, adding to the pressure. Demand for US wheat remains weak thanks to Black Sea competition. Worries about the winter wheat crop limits losses. CBOT Dec. wheat ends down 16 1/4c, or 2.5%, to $6.28 1/4. Dec. KCBT wheat ends down 13c to $7.25 and MGEX Dec. wheat ends down 11 3/4c to 9.08 3/4.
Rice (Source: CME)
US rice futures close lower as strength in the dollar placed broad pressure on grain markets. Rice fell with corn, soybeans and wheat. Further price pressure was derived from end of month profit taking by traders, following sharp gains last week fueled by increasing concerns about floods hurting output in Thailand, the world's top rice exporter. CBOT Nov rice end down 10 cents to $16.64 per hundredweight.
Corn, Soybeans Drop as Dollar Gain Erodes Prospects for U.S. Crop Exports (Source: Bloomberg)
Corn fell for the first time in three sessions and soybeans dropped to the lowest price in almost three weeks as a rally in the dollar eroded prospects for U.S. exports and reduced the investment appeal of commodities. The dollar advanced against all its major peers after MF Global Holdings Ltd. was suspended from conducting new business with the New York Federal Reserve and the Chicago Mercantile Exchange limited the firm’s customer trading to liquidation only. The Standard & Poor’s GSCI Index of 24 commodities fell as much as 1.7 percent amid concern European leaders will struggle to contain the region’s debt crisis. “Concern about erosion of demand is weighing on the markets,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The uncertainty about European debt and the MF Global situation boosted the dollar and shifted the flow of money away from riskier assets.”
Corn Drops as Improved Ukrainian Yields, Production Boost Global Supplies (Source: Bloomberg)
Corn dropped in Chicago as bigger crops in Ukraine and the European Union are intensifying competition for U.S. grain in export markets. Wheat and soybeans also declined. December-delivery corn fell as much as 1.9 percent to $6.425 a bushel on the Chicago Board of Trade and was at $6.4875 at 1:02 p.m. Paris time. The grain added 9.5 percent this month, recovering some of September’s 23-percent plunge. Ukraine had harvested 68 percent of its planted corn last week, reaping 14.1 million metric tons, more than all of last year’s harvest, the Agriculture Ministry reported. The EU, normally a net importer of corn, is exporting the grain at the fastest pace in at least seven years. Prices “could be under pressure due to lack of export demand” for U.S. corn, Lynette Tan, an analyst at Phillip Futures Pte., said from Singapore.
Grains, Soybean Futures May Fall as Dollar’s Rally Erodes Export Prospects (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Corn futures are called to open 6 cents to 8 cents a bushel lower on the Chicago Board of Trade as the dollar jumped against major currencies, eroding prospects for U.S. exports and reducing the investment appeal of commodities, Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview.
-- Wheat futures may open 6 cents to 8 cents a bushel lower on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that increasing global supplies and the dollar’s rally will reduce demand for U.S. grain, Grow said.
-- Soybean futures may open 9 cents to 11 cents a bushel lower in Chicago as crop prospects improve in South America, Grow said. Soybean-oil futures are expected to open 0.6 cent to 0.7 cent a pound lower, and soybean-meal futures may open down $2 to $3 lower per 2,000 pounds.
US grains, soybeans fall on dollar spike
SYDNEY, Oct 31 (Reuters) - U.S. corn and soybean futures posted losses in Asian trade as the dollar spiked higher against the yen ahead of a flurry of economic events this week which will determine risk appetite.
"By and large we're priced fairly as far as fundamentals are concerned," said Brett Cooper, a senior markets manager at INTL FCStone Australasia.
Philippine feed millers seeking 100,000T corn imports
MANILA, Oct 31 (Reuters) - Philippine feed millers are seeking government approval for imports of 100,000 tonnes of yellow corn between January and March to support the requirements of the livestock industry after typhoons damaged local crops, official documents showed.
The Philippine Association of Feed Millers Inc (PAFMI) said in an Oct. 26 letter to Agriculture Secretary Proceso Alcala, a copy of which was obtained by reporters, that two strong typhoons in late September and early October had damaged the quality of corn crops, pushing up local prices.
US south-west plains wheat belt faces dry week
SYDNEY, Oct 31 (Reuters) - The U.S. south-west plains wheat belt is likely to miss out on further rain this week but the eastern and northern plains could be wet due to a changing weather pattern, a forecaster said on Monday.
"This pattern does not, as yet, look to bring needed rains to the south-west wheat areas of the plains but it could bring rain or snow to the east and north part of the wheat belt," said Joel Burgio, a meteorologist with Telvent DTN.
Argentine 2011/12 corn sowing advances swiftly-gov't
BUENOS AIRES, Oct 28 (Reuters) - Argentine farmers made swift progress to plant 2011/12 corn thanks to moist soils, though cold weather caused delays in some areas, the Agriculture Ministry said on Friday.
Argentina is the world's No. 2 corn exporter but dryness has delayed seeding of the crop. Heavy rains this month provided moisture to soils and helped speed plantings, but farmers are still behind last season's pace.
Ohio wheat acres could drop to record low this year
CHICAGO, Oct 28 (Reuters) - Wheat plantings could fall to a record low this year in Ohio despite a record-high insurance price guarantee, as incessant rains stalled wheat seedings in the top growing state of the soft red winter variety.
Wheat acres left fallow this winter are likely to be planted with corn in the spring, crop experts said, as corn futures remain at a historically high premium over wheat.
Drought affects 39 pct of Ukraine '12 winter grains
KIEV, Oct 28 (Reuters) - The share of sprouted Ukrainian winter grain crops which were in poor state jumped to 39 percent as of October 27 from 29 percent as of October 24, the Agriculture Ministry said on Friday, quoting data from regions.
The ministry said in a statement that farms had sown 7.7 million hectares of winter grains for the 2012 harvest and 4.5 million had sprouted so far. The ministry added that 3.1 million hectares of the sprouted crops were in good or satisfactory condition while 1.4 million hectares were in poor state.
Ukraine to build new grain terminal in Odessa
KIEV, Oct 28 (Reuters) - The city council of Ukraine's Black Sea port of Odessa has agreed to build a new grain export terminal facility with a capacity of 2 million tonnes per year, the council said on Friday.
The terminal and port silos with a storage capacity of 680,000 tonnes, should be built by 2016, the council said.
Big EU maize crop mostly cut, offers export window
PARIS, Oct 28 (Reuters) - Maize harvesting in the European Union's major producing countries is mostly complete, confirming expectations of a big crop that should allow higher EU exports this season.
Maize has been boosted by favourable growing conditions this year as well as an increased planted area in several countries, even if summer heat in parts of the eastern part of the EU is thought to have limited yields there.
Ukraine exports 4.4 mln t grain so far 2011/12 season
KIEV, Oct 28 (Reuters) - Ukraine has exported 4.4 million tonnes of grain so far during the 2011/12 season, a senior agriculture ministry official was quoted as saying on Friday.
Interfax Ukraine news agency quoted deputy Farm Minister Oleksander Demidov as saying the volume had included 1.699 million tonnes of wheat, 1.822 million of barley and 847,400 tonnes of maize as of October 27.
Rains in Plains benefit emerging U.S. winter wheat
CHICAGO, Oct 28 (Reuters) - Rainfall and snow this week benefited the emerging hard red winter wheat crop in the U.S. Plains but more rain is needed to ensure a bountiful harvest, an agricultural meteorologist said on Friday.
"Showers the past two days did bring west Texas needed moisture. Germination and establishment concerns are now limited to 15 percent or less of the belt," said Joel Widenor, meteorologist for Commodity Weather Group.
Floods may damage quarter of Thai rice crop, exports hit
BANGKOK, Oct 28 (Reuters) - - Thailand may lose a quarter of its main rice crop in the nation's worst flooding in decades, the government estimates, which could boost prices of the staple and further squeeze shipments from the world's top exporter.
The flood damage to rice comes at a time when Thailand, which accounts for about 30 percent of global trade, has in place an intervention scheme that is likely to push prices even higher, encouraging buyers to seek alternative origins.
Indonesia says Thailand may not meet rice supply contracts
JAKARTA, Oct 28 (Reuters) - Flood-hit Thailand may not be able to meet its rice export commitments to Indonesia, the Indonesian trade minister said on Friday, forcing Southeast Asia's largest economy to look to other possible exporters.
Flooding in Thailand, the world's biggest rice exporter, all but paralysed the rice trade this week and delays to shipments are likely to continue, giving would-be buyers even more incentive to turn to India, which has returned to the export market and offers far lower prices.
Argentina Truckers Shut Grain Ports, Demanding Higher Fees (Source: CME)
The delivery of grain to Argentina's leading ports ground to a halt as a trucker's union threw up roadblocks and pickets to push for a steep increase in transportation fees. The strike falls during a relatively slow period in grain exports, as the first of the 2011-12 wheat harvest won't start coming in from the fields until December. Argentina is the world's leading exporter of soymeal and oil, ranks second in corn, third in soybeans and is a leading shipper of wheat. "You can't unload anything nor move merchandise between crushing plants," said an executive at one of the leading grain exporters who asked not to be named. The leaders of Argentine trucking union, Fetra, are slated to hold talks with federal government officials, led by Planning Minister Julio De Vido, at 3 p.m. local time, Fetra attorney Valeria Pardo told Dow Jones Newswires. However, a resolution to the conflict is unlikely today, as the union isn't going to back down and lift the strike unless it gets concrete concessions, Pardo said.
The truckers won't be satisfied with a commitment to government-supervised negotiations, she said. "They've promised us that many times before and nothing happened." Fetra is demanding an increase of about 30% in trucking fees, which would bring the minimum charge to about 27.50 pesos ($6.55) per metric ton for short-haul grain transportation. The union is also demanding better working conditions such as bathrooms and security for truckers who often have to wait days in long lines to unload their grain at the height of the harvest season. The union launched its strike in Buenos Aires Province last week, but extended the blockades to the key river ports near Rosario in Santa Fe Province early. About three-quarters of Argentina's agriculture exports are shipped from ports on the Parana River near the cities of Rosario and San Lorenzo.
The area is home to ports that service most of the leading international grain brokers, including Louis Dreyfus SA, Noble Argentina SA, the local units of Bunge Ltd. (BG) and Cargill Inc., Nidera SA and Vicentin SA. It wasn't clear if all the ports have been affected, said the general manager of the San Lorenzo chamber of commerce, Gabriel Albo. Port disruptions have been common in recent years as unions demand double-digit wage hikes amid inflation that most private sector economists say is running above 20% a year.
Rain Slows Early Western Australian Wheat Harvest -CBH (Source: CME)
The early stage of a harvest of winter grains--including wheat--in Western Australia is suffering conditions similar to the devastating conditions that severely harmed grain quality in the eastern states a year ago, a key grain logistics manager said. "We're heading into a very similar pattern" to what happened in the east coast last year, Colin Tutt, general manager logistics at Cooperative Bulk Handling Ltd., said. CBH operates a near monopoly on grain storage and export in Western Australia. Heavy rainfall and flooding led to major downgrading of grain quality in the east coast during the last harvest. However, while wet weather is causing problems for ripe crops in the north, about 70% of the state's winter crops may still benefit from the rainfall, he said. CBH estimates the harvest's grain intake around 13 million metric tons, of which 70% is usually wheat, or 9.1 million tons.
As deliveries to CBH account for about 90% of total state grain production, total wheat output may approach 10 million tons, second only to 11.1 million tons produced in 2003-04 and more than twice last year's drought-reduced wheat output of 4.7 million tons. Nearly all the wheat produced in the state is available for export. The harvest in Western Australia has been delayed in the past week, with rainfall of up to 120 millimeters on some ripe crops and general falls throughout the wheatbelt in a 30-40 mm range, with more falls of 20-30 mm forecast Thursday and Friday, Tutt said. The rainfall has already slowed harvest and delivery to CBH's upcountry storages. CBH has received about 1% of expected deliveries, well below expectations, with discolored barley grains, reduced wheat protein levels and some sprouting of grains already surfacing, he said. Wheat protein levels could be a full percentage point lower than the 11%-plus the northern wheatbelt usually produces, he said.
While quality is down, "yields are outstanding," he said. One of Tutt's major challenges is to ensure plentiful supplies of grain at CBH's four coast export terminals. "We've got a big shipping program with 2.7 million tons during harvest to fill, so we need to get it going," he said. "It's just a matter of how much we can get in [to storage] before the next rain comes."
Thai Floods May Spare Most of Bangkok as Efforts to Divert Water Suceed (Source: Bloomberg)
Thai Prime Minister Yingluck Shinawatra said most of Bangkok will be spared from floods that have swamped some outer suburbs as efforts to drain water to the east and west of the capital are succeeding. “If everything goes as planned, there will be more relief,” Yingluck told reporters in Bangkok today. She said it was too early to say whether the flood threat had eased because some water gates in the capital’s canals need to be repaired to stem the flow of floodwaters into some districts. Authorities are diverting water to spare the capital from floods that have spread over 63 of Thailand’s 77 provinces since late July, killed at least 381 people and swamped factories and farms. Efforts to save Bangkok by building temporary dikes around the inner city have exacerbated flooding in outlying districts, sparking clashes between residents and city officials.
Thai Exporters Declare Force Majeure On Rice Shipments (Source: CME)
Thai exporters have declared force majeure on shipments of several thousand tons of rice following disruptions caused by heavy flooding, trading executives said. Rice is a major foreign exchange earner for Thailand, the world's largest exporter, with shipments worth more than $500 million on average made each month. But tighter supply and logistical bottlenecks are forcing traditional buyers of Thai rice to look for other suppliers. "There are logistical constraints in moving rice to ports and loading cargoes," a Bangkok-based executive with a global commodities trading company said. Buyers aren't pressing for shipments and are accepting force majeure as they are aware of the situation, he said, adding cheaper rice is available from other exporters such as India and Pakistan. Shipments haven't stopped, but only the grain currently in port warehouses is being loaded, said Chookiat Ophaswongse, former president of Thai Rice Exporters' Association.
He said more shipments are being postponed than cancelled at this point. Thai exporters said they are more keen on deferring shipments but some buyers want to cancel the orders so they can buy cheaper rice from the Indian subcontinent. Rice supplied by India and Pakistan is cheaper by at least $150/ton. Traders expect November rice shipments from Thailand to be less than 500,000 tons, compared with around 700,000 tons-750,000 tons in October. Monthly exports were 1.0 million tons or higher until August. Daily loading of rice at Bangkok port has slumped to 20,000 tons from the usual 25,000-30,000 tons, said Chookiat. Exporters are delaying shipments by 60 days to 90 days, said Christophe Cousin, managing director of Prasert & Sons, a Thailand-based rice brokerage. Rice millers in Pathum Thani and Nakhon Sawan provinces who are hit by flooding are unable to supply the grain to exporters, he said.
The International Grains Council Friday revised down the 2012 production forecast for Thailand by 1.5 million metric tons, or 7.2% to 19.2 million tons. Thailand's rice exports will likely fall 24% to 8.0 million tons, IGC said. Some exporters put the estimate even lower at 7.0 million tons.
Thai cane crop in focus; coffee watches weather
SINGAPORE, Oct 31 (Reuters) - Thailand will offer more than 90,000 tonnes of sugar in a tender this week as the market assesses the impact of the country's worst floods in decades on the cane crop, while premiums could slip on weak demand, dealers said. "The market certainly cares (about) what's happening in Thailand. Estimates of the extent of the likely damage as result of the floods vary widely," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.
Thai PM says Bangkok may dodge flood disaster
BANGKOK, Oct 29 (Reuters) - Receding floodwaters north of Bangkok have reduced the threat to the Thai capital, the prime minister said on Saturday, but high tides in the Gulf of Thailand will still test the city's flood defences.
"If things go on like this, we expect floodwater in Bangkok to recede within the first week of November," Prime Minister Yingluck Shinawatra said on national television
India ministries agree 2011/12 sugar output at 24.7-25 mln T
NEW DELHI, Oct 31 (Reuters) - India's sugar output will be 24.7-25 million tonnes in 2011/12, Food Minister K.V. Thomas said on Monday, a figure agreed with the farm ministry which had previously forecast 26 million tonnes.
That will still be above demand of 22-23 million tonnes and is slightly above Thomas' estimate in September of 24.6 million tonnes. --
West Has Moral Obligation To Reduce Food Waste -UK Minister (Source: CME)
The West has a moral obligation to reduce food waste, at a time when the issue of global food security rises to the top of world political agendas, Jim Paice, the U.K.'s minister of state for Agriculture and Food told a conference in London. The French President Nicolas Sarkozy has put improving food security at the top of his agenda during his leadership of the Group of 20 largest economies. World food prices surged to a record high in February, according to the United Nations, and the rising cost of staple foodstuffs was blamed for sparking the Arab spring. "The Western world must help poor countries to invest in technology to avoid post-harvest losses in order to reduce food waste," Paice said. "The West must also adhere to reduce waste, which will help to limit food price volatility." High and volatile food prices can be avoided through the removal of food commodity export bans, Paice said. "Trade stocks in one area of the globe can compensate for a lack of them in another part," he added.
Analysts cite a Russian export ban as causing a price spike in grain prices earlier this year. The Russian government imposed the ban on grain exports on Aug. 15 last year after severe drought reduced the harvest and the restriction continued until June 30 this year. "Liberalized and efficient markets will help to cap food spikes that have been witnessed this year," the minister of state added. Transparency in world food markets is also vital to limiting price upside in commodity markets, Paice said. "There is a need to get the right data to market participants in food markets," said Paice. "That way, farmers can react to world prices." Agriculture ministers of the G20 industrialized and emerging nations, agreed this year to create a global database to compile information on food production, consumption and stocks aimed at improving transparency in agriculture markets and damping production shocks.
Russia unlikely to emerge as major sugar exporter
MOSCOW/LONDON, Oct 28 (Reuters) - Russia is moving toward self-sufficiency in sugar but a number of obstacles will prevent its emergence as a major exporter.
Russia, which was the world's top raw sugar importer in the early 2000s when it used to buy around 4 million tonnes a year, has slid down the rankings as an importer as strong prices encouraged domestic investment. The country looks set to produce just short of its consumption requirements in 2011/12.
Asia LNG prices to continue rising-Shell CEO Voser
SINGAPORE, Oct 31 (Reuters) - Oil major Royal Dutch Shell Plc expects prices of liquefied natural gas (LNG) in Asia to continue rising and refining margins to stay under pressure in 2012, its chief executive said on Monday.
"LNG prices are rising and we see this continuing," Peter Voser told Reuters on the sidelines of the Singapore International Energy Week (SIEW).
PetroChina to supply 25 pct more gas in winter-spring -paper
BEIJING, Oct 31 (Reuters) - PetroChina Co Ltd , the dominant natural gas supplier in China, will supply 25 percent more of the fuel in the coming winter-spring season than a year earlier, China Petroleum Daily reported on Monday.
The report in the newspaper run by PetroChina parent China National Petroleum Corp (CNPC) did not provide a volume.
China 2011 crude runs seen up 8.5 pct y/y -federation
BEIJING, Oct 31 (Reuters) - China's crude oil throughput will increase 8.5 percent from a year earlier to about 460 million tonnes this year, or about 9.2 million barrels per day, China Petroleum and Chemical Industry Federation said on Monday.
If the throughput matches the forecast, it suggests refiners in the world's second-largest oil consuming country would accelerate crude runs significantly in the fourth quarter based on earlier government data.
Libya's oil exports to jump to 350,000 bpd in Nov-sources
TRIPOLI, Oct 30 (Reuters) - Libya's crude oil exports will jump to almost 350,000 barrels per day in November, more than double the volume sold the previous month, sources at the National Oil Company (NOC) told Reuters in an interview on Sunday.
The NOC plans to sell a total of up to 14 cargoes of oil from several fields, primarily in the east and at offshore sites which escaped the worst of the damage inflicted by the war and located in areas that were liberated soon after the uprising.
Singapore may expand LNG terminal for spot trading
SINGAPORE, Oct 31 (Reuters) - Singapore is prepared to expand the capacity of its upcoming liquefied natural gas (LNG) terminal for spot trading as power utilities seek to boost output by using the fuel to meet local demand, said S Iswaran, Second Minister for Trade and Industry.
Britain's BG Group has filled orders for almost 90 percent of its exclusive 3 million tonnes per year franchise to import LNG through the terminal, just over two years into its 20-year deal, Iswaran said.
US coal consumption up 4 pct last week - Genscape
Oct 28 (Reuters) - U.S. coal consumption rose 4 percent last week but was down 12 percent from the same week a year ago, according to power industry data monitor Genscape.
Coal use swings up and down seasonally, and varies from week to week and region to region, depending on electricity demand to run air conditioners or power heaters.
Euro Coal-prices rise despite weaker oil
LONDON, Oct 28 (Reuters) - European prompt physical coal prices rose slightly on Friday, shrugging off falls in oil and coal swaps.
Physical demand remained thin, because some players with long positions lack the capacity to burn coal and many utilities are burning down their stockpiles before ordering new deliveries.
Crude Oil Surges to Biggest Monthly Increase in More Than Two Years (Source: Bloomberg)
Oil surged in October to the biggest monthly gain in more than two years on speculation that a recovering economy will boost energy demand and reduce supplies. Futures advanced as government reports showed the U.S. economy grew at the fastest pace in a year in the third quarter and oil inventories reached a 20-month low in the week ended Oct. 14. Crude slipped today after Japan stepped in to foreign- exchange markets to weaken the yen against the dollar. “The supply and demand fundamentals look quite supportive as inventories in industrialized nations have come down a decent amount,” said Katherine Spector, a commodities strategist with CIBC World Markets Corp. in New York. “You only need demand to grow incrementally to tighten the balance.” Crude oil for December delivery declined 13 cents to settle at $93.19 a barrel on the New York Mercantile Exchange. Futures rose 18 percent this month, the biggest gain since May 2009.
China Holds Talks With Vale, Miners on Iron Ore Pricing Model After Plunge (Source: Bloomberg)
China, the world’s biggest iron ore buyer, said it’s held talks with Vale SA (VALE3), Rio Tinto Group and BHP Billiton Ltd. (BHP) to set up a new pricing mechanism after a plunge in cash market prices. “We hope to build a new stable, transparent, fair and reasonable pricing mechanism,” Zhang Changfu, vice chairman and secretary general of the China Iron and Steel Association, told reporters today in Beijing. “We wish to make it more well- organized and healthy.” Iron ore prices for immediate delivery fell 32 percent this month on China’s credit tightening and slowing steel demand from builders and automakers. Most Chinese customers are seeking to replace quarterly contracts with spot pricing, the largest ore producer, Vale, said last week.
China steel assn says iron ore prices likely to drop further
BEIJING, Oct 31 (Reuters) - The China Iron and Steel Association (CISA) said the price of iron ore was likely to decline further in the coming weeks, with steel mills still unwilling to buy and stockpiles of expensive ores remaining stubbornly high.
Zhang Changfu, CISA's vice-chairman, told a news briefing on Monday that stockpiles at eight major ports had risen to 98 million tonnes, with much of it bought at prices of around $165 per tonne.
Iron ore slump to boost shorter contracts, risks
SINGAPORE, Oct 31 (Reuters) - A slide in iron ore prices has driven miners to alter costly quarterly contracts to please Chinese clients, but spot pricing, which magnifies the impact of price swings, is still distant.
Iron ore's slump of 34 percent since early September revealed the flaws of a system that prices contracts based on the previous quarter's spot rates with a one-month lag, and opened the door for a more flexible mechanism for top consumer China while it grapples with weakening steel demand.
Global iron ore prices reaching turning point - Baosteel
SHANGHAI, Oct 31 (Reuters) - The recent slump in global iron ore price signals the market may be reaching a turning point, China's top listed steel mill Baoshan Iron & Steel Co Ltd (Baosteel) , said on Monday, adding that the price correction will allow a healthy expansion for steel producers and miners.
Baosteel, which reported a 51-percent slump in third-quarter net profit on Friday, also said it was in negotiations with top iron ore producer Vale SA to review prices for fourth-quarter supplies.
Iron Ore-Further price declines expected amid demand slump
BEIJING, Oct 31 (Reuters) - The iron ore market remained weak on Monday with long-suffering Chinese traders unwilling to risk any more purchases amid fears that prices will plummet further following a record decline last week.
"Plummet is an understatement -- no one can see the bottom and they all just want out," said a commodities broker based in Hong Kong.
CSN sees iron ore, steel sales growing next year
SAO PAULO, Oct 28 (Reuters) - CSN , Brazil's most profitable steelmaker, expects to sell more iron ore and steel next year, executives said on Friday, in a sign that they are less concerned than investors about the risk of global recession and a rout in prices for the metal.
Even as the outlook remains challenging, the company could sell around 33 million tonnes of iron ore next year, about 6.4 percent more than its 31 million tonne target for 2010, Daniel Santos, who heads the mining division at the Sao Paulo-based steelmaking group, said in a conference call.
Baltic index at 3-week low, cargo slowdown weighs
LONDON, Oct 28 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell for a third day on Friday as sluggish demand for iron ore cargoes continued to weigh on sentiment.
The overall index fell 73 points or 3.49 percent to 2,018 points and was at its lowest in three weeks.
