20120817 1658 Global Markets & Commodities Related...

GLOBAL MARKETS: Asian shares firmed as German Chancellor Angela Merkel voiced support for the European Central Bank's efforts to contain the debt crisis in the euro zone, soothing investor nerves and prompting them to shift money to riskier assets. European stock index futures pointed to a higher open, extending their sharp three-week rally, helped by growing hope that the worst of the euro zone crisis might be over. The S&P 500 closed at its highest level since early April on Thursday after comments from German Chancellor Angela Merkel that appeared to support the European Central Bank's efforts to fight the region's debt crisis, while Cisco Systems jumped after it raised its dividend. (Reuters)

FOREX: The euro held onto most of its gains from the previous session, bolstered by expectations for impending action to stem Europe's more than two-year old debt crisis.  (Reuters)

FOREX-Euro holds onto most gains on hopes for ECB action, Aussie slides
The euro held onto most of its gains from the previous session, bolstered by expectations for impending action to stem Europe's more than two-year old debt crisis.
"The Germans will fight tooth and nail to defend the euro ... while the EUR/USD remains very weak, the recent stabilisation in the currency is a big relief to policymakers," said Kathy Lien, Managing Director of FX Strategy for BK Asset Management.

Merkel backs Draghi, urges rapid move to closer union  (Reuters)
German Chancellor Angela Merkel voiced support for ECB President Mario Draghi's crisis-fighting strategy on Thursday and pressed her European partners to move swiftly towards a closer integration of fiscal policies, saying time was running short.

Euro zone heading into another recession (Reuters)
The euro zone will slip into recession and won't grow until 2013, according to the latest Reuters poll of economists who also don't expect any new aggressive policy response from the European Central Bank.

Russia grain stocks at farms at lowest since 2006 (Reuters)
Russia's grain farms started the 2012/13 marketing season with stocks at historically low levels due to strong demand, reflecting fears of a possible restriction on Russia's grain exports.

GRAINS: U.S. wheat rose for a third straight session on renewed concerns of reduced supplies from Russia, although the market is still facing a fourth straight week of declines as a drought-driven rally in grain markets loses momentum. (Reuters)

Chevron appeals Brazil ban, seeks oil field restart (Reuters)
Chevron, the No. 2 U.S. oil company, has appealed against an injunction banning it and its drilling contractor Transocean Ltd from operating in Brazil while civil and criminal charges over an oil spill last November are judged.

OIL: Brent crude slipped below $115 as supply worries eased on a possible release of oil reserves by the United States while Israeli comments on Iran reduced fears of a potential conflict in the Middle East that could disrupt exports. (Reuters)

Euro Coal-Prices steady, market watches Colombia strikes
LONDON, Aug 16 (Reuters) - Physical European prompt coal prices were unchanged at around $93-$94 a tonne for a second day on Thursday as the market waited to see when Colombian shipments would resume and whether that would trigger a bout of selling and a further price fall.
Prices dropped by $2 a tonne on Tuesday after a Colombian court ruled that a strike by workers on the Fenoco railway was illegal and the workers voted to return to work, but the union is waiting for the Labour Ministry to confirm whether the vote was legal or not.

Indonesian tin producers cut exports due to low prices
JAKARTA, Aug 16 (Reuters) - At least six producers in Indonesia's main tin mining hub of Bangka Belitung have cut exports on the grounds that current global prices for the metal are too weak, company executives said.
Indonesia is the world's top tin exporter, but with current low demand thinning producers' profit margins to below cost, there may be further disruptions to shipments, officials said.

Brazil's Vale expects iron ore price to recover in Sept (Reuters)
Brazil's Vale, the world's No. 2 mining company, expects iron ore prices to start recovering in September due to falling stocks in China, Chief Executive Murilo Ferreira said on Thursday.

Iron Ore-Shanghai rebar hits record low, ore at 2-1/2 yr trough
SINGAPORE, Aug 17 (Reuters) - Shanghai steel futures fell to record lows on Friday and are heading for their fifth weekly loss in six as slower demand in top steel market China drags down prices, trapping iron ore at 2-1/2 year troughs.
Brazil's Vale , the world's biggest iron ore miner, said it expects prices to start rebounding next month as Chinese steel mills replenish stockpiles, although traders said they were unsure given that the sustained decline in prices since early July has failed to draw buyers back into the spot market.

China aluminium buying may shore up LME prices
HONG KONG, Aug 16 (Reuters) - Chinese manufacturing plants and merchants have increased purchases of spot primary aluminium in Asia, traders said, to take advantage of London Metal Exchange prices that are down more than a fifth from their year highs.
The spike in buying by the world's top aluminium consumer  comes despite premiums for spot metal over LME prices rising by a quarter since late May and could help prop up LME prices.

Brazil's Vale expects iron ore price to recover in Sept
RIO DE JANEIRO, Aug 16 (Reuters) - Brazil's Vale, the world's No. 2 mining company, expects iron ore prices to start recovering in September due to falling stocks in China, Chief Executive Murilo Ferreira said on Thursday.
Ferreira said supplies of the metal in China, Brazil's main trading partner, would last 20 days rather than the previous 30 days and could soon pressure global markets.

Gold demand hits lowest in over 2 years in Q2 -WGC
LONDON, Aug 16 (Reuters) - Gold demand fell to its lowest level in more than two years in the second quarter, the World Gold Council said on Thursday, as a drop in buying in major consumers India and China outweighed a record quarter for central bank purchases.
Overall gold consumption fell 7 percent or nearly 76 tonnes to 990 tonnes in the three months to June, its lowest quarterly level since the first three months of 2010, the WGC said in its quarterly Gold Demand Trends report.

Chinese smelters want gov't to revive metal stockpiling scheme
HONG KONG, Aug 16 (Reuters) - Hit by slowing economic growth, China's smelters are lobbying the government to revive a state-run scheme to stockpile industrial metals that would support prices and possibly lead to a surge in imports, industry sources said on Thursday.
China is the world's top consumer of industrial metals such as copper and aluminium. After the 2008/09 financial crisis, smelters successfully lobbied the government to allow the State Reserves Bureau (SRB) to launch an ad-hoc stockpiling programme that triggered an increase in imported metals in 2009.

Weak monsoon to hit Indian gold demand in H2- WGC
MUMBAI, Aug 16 (Reuters) - Gold demand in India, the world's top consumer, is likely to fall by a fifth in the second half of 2012 from a year ago on higher prices and as weak monsoon rains hurt incomes of rural households, a senior World Gold Council (WGC) official said.
Lower demand during the second half will drag the country's total demand in 2012 to 688-700 tonnes from 933.4 tonnes a year ago, Ajay Mitra, managing director of India and the Middle East at the WGC, said on Thursday.

BASE METALS: London copper extended gains, with German Chancellor Angela Merkel's public support for the European Central Bank's efforts to fight the euro zone debt crisis boosting appetite for risk.  (Reuters)

PRECIOUS METALS: Gold traded nearly flat, holding on to gains in the previous session from its biggest daily rise in two weeks on German Chancellor Angela Merkel's support for more action by the European Central Bank to contain the bloc's debt crisis.  (Reuters)

METALS-Copper rises on hopes for firm action on Europe crisis
London copper extended gains, with German Chancellor Angela Merkel's public support for the European Central Bank's efforts to fight the euro zone debt crisis boosting appetite for risk.
"Merkel's comments gave the markets some hope and those who have been looking for opportunities to buy in did that," said a Shanghai-based trader.

PRECIOUS-Gold steady; heightened hopes of ECB action support
Gold traded steady, holding on to gains in the previous session from its biggest daily rise in two weeks on German Chancellor Angela Merkel's support for more action by the European Central Bank to contain the bloc's debt crisis.
"The market is still moving on changing expectations of central bank actions, and is so far unwilling to push prices out of the $1,590 to $1,630 range," said Nick Trevethan, a senior commodity strategist at ANZ in Singapore.

Baltic index dips as capesize rates touch 3-year lows
Aug 16 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry commodities, fell on Thursday as rates for capesize vessels sank to touch more than three-year lows due to chronic oversupply and limited activity.
The main index, which gauges the cost of shipping commodities such as iron ore, cement, grain, coal and fertiliser, fell 8 points or 1.1 percent to 720 points.

Weak rates weigh on DryShips results, shares down
Aug 16 (Reuters) - Weak shipping rates weighed on DryShips Inc's  quarterly results, taking the shine off a jump in demand at its drilling unit Ocean Rig UDW  .
Shares of the company fell as much as 7 percent in extended trade. They closed at $2.31 on Thursday on the Nasdaq.

Asia Dry Bulk-Rates likely to keep falling on China slowdown
SINGAPORE, Aug 16 (Reuters) - Rates for panamax ships on key Asian dry bulk freight routes are expected to fall towards lows for the year next week, as an economic slowdown in China cuts into demand for seaborne coal and iron ore, ship brokers said on Thursday.
In the panamax market, the rate for vessels travelling via the transpacific route on Wednesday dropped nearly 8 percent to a two-month low of $5,822 a day, from $6,316 last week. Rates have struggled to recover since hitting a three-year low of $4,895 a day in June.