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Stocks Drop as Earnings Miss Estimates; Commodities Fall, Yen Strengthens

by on March 9, 2010

By David Merritt March 9 (Bloomberg) — Stocks fell as companies reported earnings that missed analysts’ estimates, raising concern the yearlong rally in equities can’t be sustained. Commodities weakened while the yen and government bonds rose. The MSCI World Index of 23 developed nations’ stocks fell 0.4 percent at 11:57 a.m. in London. Futures on the Standard & Poor’s 500 Index declined 0.5 percent. Crude oil lost 1.7 percent. The yen advanced against all 16 of its most-traded counterparts, while 10-year Treasury yields slid 3 basis points. European Aeronautic, Defence & Space Co., owner of planemaker Airbus SAS, posted a wider-than-expected annual loss and scrapped its dividend for the first time in its 10-year history. Copper producer Antofagasta Plc’s full-year profit plunged 61 percent because of lower prices and output. The results show the risks still associated with the economic recovery, one year after the S&P 500 started its best rally in 76 years buoyed by low interest rates and more than $12 trillion committed by governments worldwide to revive growth. “The global economy is far from equilibrium,” said Tim Brunne , a credit strategist at UniCredit SpA in Munich. “Risky assets” are being supported by “ample liquidity and low interest rates.” More than four shares fell for every one that rose on the Stoxx Europe 600 Index, which dropped 0.7 percent. The gauge has rallied 61 percent since its low a year ago. EADS plunged 4.7 percent in Paris, its biggest drop since November. Antofagasta fell 1.4 percent in London. Declines were limited as Nestle SA , the world’s biggest food company, rose 1 percent in Zurich after JPMorgan Chase & Co. raised its recommendation on the stock to “overweight” from “neutral.” Asian Stocks Most Asian stocks fell, even as the MSCI Asia Pacific Index gained 0.2 percent. Fujitsu Ltd. declined for a second day in Tokyo, slumping 3.9 percent after altering its explanation for the resignation of its former president. China Life, the nation’s biggest insurer, gained 3 percent in Hong Kong after saying profit may have climbed more than 200 percent in 2009. U.S. futures signaled the S&P 500 may decline from near a six-week high. The index, which has rallied 68 percent since March 9, 2009, climbed in three of the last four weeks as reports on employment and consumer spending added to evidence that economic growth is strengthening. The yen rose 1.2 percent to 121.68 per euro and appreciated 0.6 percent to 89.79 against the dollar. Bonds rose, sending the yield on the 10-year Treasury note down to 3.69 percent, and the German bund yield 4 basis points lower to 3.12 percent. The U.S. sells a record-tying $40 billion of three-year notes today, part of $74 billion of auctions this week. Greek Bonds The 10-year Greek yield declined 5 basis points to 6.17 percent, with the premium investors demand to hold the securities instead of bunds little changed at 305 basis points, according to Bloomberg generic yields. Greek Prime Minister Minister George Papandreou will press U.S. President Barack Obama to help Europe combat “unprincipled speculators,” who he said have roiled markets and threaten a new global financial crisis. Papandreou, struggling to convince investors his government is serious about taming Europe’s biggest budget deficit, meets Obama and Treasury Secretary Timothy F. Geithner today in his first U.S. visit since being elected in October. Emerging Markets Hungary’s forint fell 0.9 percent against the euro. Turkey’s lira weakened 0.7 percent and the South African rand dropped 1 percent against the dollar. The MSCI Emerging Markets Index lost 0.3 percent, its first decline in three days. Abu Dhabi’s ADX index gained 0.7 percent and Dubai’s DFM General Index advanced 0.8 percent on speculation Dubai World, the state-owned holding company in talks to renegotiate about $26 billion of debt, is making progress in the talks. Crude oil for April delivery dropped $1.39 cents, or 1.7 percent, to $80.48 a barrel in electronic trading on the New York Mercantile Exchange as analysts forecast an industry report later today will show a weekly increase in U.S. crude supplies. Oil is up 71 percent over the past year. White, or refined, sugar dropped 2.7 percent to $574 a metric ton on the Liffe exchange in London, the lowest price since Nov. 10, while copper was down $70 at $7,400 a metric ton on the London Metal Exchange. The LME index of six industrial metals including copper and zinc has climbed 96 percent in the past year. Copper and nickel have more than doubled and gold has increased 22 percent. To contact the reporter on this story: David Merritt in London on dmerritt1@bloomberg.net .

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Copper Jumps to Five-Week High in London as Chile Quake Disrupts Supplies

by on February 28, 2010

By Bloomberg News March 1 (Bloomberg) — Copper jumped to the highest level in more than five weeks in London and by the limit in Shanghai after a magnitude-8.8 earthquake disrupted supplies from Chile, the world’s largest producer. Copper for three-month delivery on the London Metal Exchange surged as much as 5.6 percent to $7,600 a metric ton, the highest price since Jan. 20. The contract traded at $7,430 a ton at 9:46 a.m. in Shanghai. The June-delivery contract on the Shanghai Futures Exchange climbed 5 percent from the previous settlement price to 61,150 yuan ($8,958) a ton, and last traded at 60,410 yuan. The quake which hit central Chile on the morning of Feb. 27 forced Codelco and Anglo American Plc to halt mine operations. Codelco said it will meet supply contracts with shipments from undamaged plants in Chile’s north. Copper represented half of Chile’s $53 billion of exports last year. “The initial reaction to the quake is for copper to shoot up,” Xu Liping, an analyst at HNA Topwin Futures Co., said from Shanghai today. “The extent of the rally will depend on what additional information emerges and interpretation of the actual supply damage,” he said. Codelco’s El Teniente and Andina mines halted operations because of the power outage on the day the quake struck, and the company said two mines will reopen “shortly” after inspectors failed to find major damage. Anglo American Plc said its Los Bronces and El Soldado mines in Chile stopped operating for the same reason, without giving more details on whether the company was planning a restart. The South American country’s production of the metal used in pipes and wiring climbed 0.7 percent to 5.4 million metric tons in 2009. Aluminum in London was 0.3 percent up at $2,140 a ton, zinc added 1.4 percent to $2,226, lead increased 1.6 percent to $2,200 a ton, nickel rose 0.6 percent to $21,300, and tin climbed 1 percent to $17,300. — Li Xiaowei . With reporting by Sebastian Boyd, James Attwood and Eduard Thomson in Santiago. Editors: Richard Dobson, Matthew Oakley. To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

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Asian Stocks, Currencies Fall on Concern Economic Recovery May Be Derailed

February 3, 2010

By Linus Chua and Chan Tien Hin Feb. 4 (Bloomberg) — Asian stocks and currencies fell on concerns the region’s economic recovery may be derailed after Australian retail sales unexpectedly fell and New Zealand’s jobless rate rose to the highest level in more than 10 years. The MSCI Asia Pacific Index lost 0.8 percent to 117.62 as of 12:40 p.m. in Tokyo. The Australian dollar dropped to a six- week low, the New Zealand currency slid to the weakest since September, and South Korea’s won declined for the first time in three days. Standard & Poor’s 500 Index futures fell 0.1 percent. Australian retail sales decreased for the first time in five months and New Zealand’s unemployment soared to 7.3 percent in the fourth quarter. The data raised investors’ concerns that the Asian benchmark stock index’s 34 percent gain last year won’t be sustained as economic growth slows. “The market optimism is misplaced. It doesn’t reveal the true depth of the problem of unemployment rates and the true picture of the structural problems of overconsumption,” said Scott Lim , who helps oversee $670 million as chief executive officer of MIDF Amanah Asset Management Bhd. in Kuala Lumpur. “This is going to be tough year, a reckoning year that we have going into an era of depressing times ahead.” Japan’s Nikkei 225 Stock Average dropped 0.6 percent and Hong Kong’s Hang Seng Index declined 1 percent. Australia’s S&P/ASX 200 Index slipped 0.7 percent. BHP Billiton Ltd. , the nation’s biggest oil producer and the world’s biggest mining company, dropped 1.7 percent to A$40.80. Rio Tinto Ltd. , the world’s third-biggest mining company, lost 2.5 percent to A$70.19. Toyota, Honda Toyota Motor Corp. fell 4.1 percent to 3,260 yen after Bloomberg News reported that the Prius hybrid may be recalled in Japan after the government ordered an investigation of brake problems. Outside of Japan, nearly 8 million Toyota vehicles have been recalled to fix problems linked to unintended acceleration. Rival Honda Motor Co. rose 2.1 percent to 3,205 yen as it increased its full-year profit forecast by 71 percent because of a weaker yen. Australia’s dollar fell 0.2 percent to 88.17 U.S. cents, while the New Zealand dollar declined as low as 69.68 U.S. cents. The won dropped 0.4 percent to 1,153.52 per dollar. “Signals remain mixed about the strength of economic recovery,” said Tim Schroeders , who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. “A tug of war seems to be occurring between fundamentals and liquidity at the moment.” Dollar, Treasures Gain The dollar and Treasuries gained as concern European sovereigns will struggle to reduce deficits and the economic recovery in Asia will slow boosted demand for the safest assets. The greenback advanced against the euro and the yen strengthened against 12 of its 16 most-traded counterparts following economic data from Australia and Zealand, boosting demand for Japan’s currency as a refuge. The dollar climbed to as high as $1.3867 per euro in Tokyo from $1.3893 in New York yesterday. The benchmark 10-year Treasury note yielded 3.70 percent, according to BGCantor Market Data. Copper for three-month delivery advanced 0.6 percent to $6,631 a metric ton after slumping 3.3 percent yesterday. The metal used in homes, cars and appliances dropped to $6,525 a ton yesterday, the lowest level since Nov. 13. Aluminum increased 0.5 percent to $2,093.75 a ton. Crude oil traded near $77 a barrel in New York after dropping yesterday on a U.S. Energy Department report that showed a bigger-than-forecast increase in inventories as refineries idled units and imports climbed. Crude oil for March delivery traded at $76.80 a barrel, down 18 cents, in electronic trading on the New York Mercantile Exchange. To contact the reporters for this story: Linus Chua at lchua@bloomberg.net ; Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net

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Asian Stocks, Currencies Fall on Concern Economic Recovery May Be Derailed

February 3, 2010

By Linus Chua and Chan Tien Hin Feb. 4 (Bloomberg) — Asian stocks and currencies fell on concerns the region’s economic recovery may be derailed after Australian retail sales unexpectedly fell and New Zealand’s jobless rate rose to the highest level in more than 10 years. The MSCI Asia Pacific Index lost 0.8 percent to 117.62 as of 12:40 p.m. in Tokyo. The Australian dollar dropped to a six- week low, the New Zealand currency slid to the weakest since September, and South Korea’s won declined for the first time in three days. Standard & Poor’s 500 Index futures fell 0.1 percent. Australian retail sales decreased for the first time in five months and New Zealand’s unemployment soared to 7.3 percent in the fourth quarter. The data raised investors’ concerns that the Asian benchmark stock index’s 34 percent gain last year won’t be sustained as economic growth slows. “The market optimism is misplaced. It doesn’t reveal the true depth of the problem of unemployment rates and the true picture of the structural problems of overconsumption,” said Scott Lim , who helps oversee $670 million as chief executive officer of MIDF Amanah Asset Management Bhd. in Kuala Lumpur. “This is going to be tough year, a reckoning year that we have going into an era of depressing times ahead.” Japan’s Nikkei 225 Stock Average dropped 0.6 percent and Hong Kong’s Hang Seng Index declined 1 percent. Australia’s S&P/ASX 200 Index slipped 0.7 percent. BHP Billiton Ltd. , the nation’s biggest oil producer and the world’s biggest mining company, dropped 1.7 percent to A$40.80. Rio Tinto Ltd. , the world’s third-biggest mining company, lost 2.5 percent to A$70.19. Toyota, Honda Toyota Motor Corp. fell 4.1 percent to 3,260 yen after Bloomberg News reported that the Prius hybrid may be recalled in Japan after the government ordered an investigation of brake problems. Outside of Japan, nearly 8 million Toyota vehicles have been recalled to fix problems linked to unintended acceleration. Rival Honda Motor Co. rose 2.1 percent to 3,205 yen as it increased its full-year profit forecast by 71 percent because of a weaker yen. Australia’s dollar fell 0.2 percent to 88.17 U.S. cents, while the New Zealand dollar declined as low as 69.68 U.S. cents. The won dropped 0.4 percent to 1,153.52 per dollar. “Signals remain mixed about the strength of economic recovery,” said Tim Schroeders , who helps manage $1.1 billion at Pengana Capital Ltd. in Melbourne. “A tug of war seems to be occurring between fundamentals and liquidity at the moment.” Dollar, Treasures Gain The dollar and Treasuries gained as concern European sovereigns will struggle to reduce deficits and the economic recovery in Asia will slow boosted demand for the safest assets. The greenback advanced against the euro and the yen strengthened against 12 of its 16 most-traded counterparts following economic data from Australia and Zealand, boosting demand for Japan’s currency as a refuge. The dollar climbed to as high as $1.3867 per euro in Tokyo from $1.3893 in New York yesterday. The benchmark 10-year Treasury note yielded 3.70 percent, according to BGCantor Market Data. Copper for three-month delivery advanced 0.6 percent to $6,631 a metric ton after slumping 3.3 percent yesterday. The metal used in homes, cars and appliances dropped to $6,525 a ton yesterday, the lowest level since Nov. 13. Aluminum increased 0.5 percent to $2,093.75 a ton. Crude oil traded near $77 a barrel in New York after dropping yesterday on a U.S. Energy Department report that showed a bigger-than-forecast increase in inventories as refineries idled units and imports climbed. Crude oil for March delivery traded at $76.80 a barrel, down 18 cents, in electronic trading on the New York Mercantile Exchange. To contact the reporters for this story: Linus Chua at lchua@bloomberg.net ; Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net

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Commodities Set for Biggest Drop in 13 Months on Concern Demand May Slow

January 29, 2010

By Claudia Carpenter Jan. 29 (Bloomberg) — Commodities headed for the biggest monthly decline in 13 months on concern that demand for raw materials may wane as governments take steps to control economic growth. The Standard & Poor’s GSCI Index of 24 raw materials is down 6.4 percent this month, the most since December 2008, led by slides of 17 percent for zinc and 15 percent for lead. Copper has lost 6.5 percent this month, also the most in 13 months, and crude oil is down 7.3 percent, the first decline since July. Sugar, feeder cattle and platinum climbed. Commodities last year rose the most in four decades, led by a doubling in copper, sugar and lead prices, as government spending programs spurred speculation that raw-materials demand would increase after the biggest slump in the global economy since World War II. Investors poured a record $92 billion into commodities last year, Barclays Capital estimates. “The optimism that led into 2010 has dried up very quickly,” said Jonathan Barratt , managing director at Commodity Broking Services Pty in Sydney. “Economies have been running off stimulus packages, not off genuine demand.” The Federal Reserve this week said it is taking steps to prepare investors for an end to stimulus. China started to restrict bank lending this month. Copper, Oil Copper for delivery in three months dropped $50, or 0.7 percent, to $6,848 a metric ton at 9:28 a.m. on the London Metal Exchange. Prices have declined 12 percent from this year’s high three weeks ago. Crude oil for March delivery was at $74.01 a barrel on the New York Mercantile Exchange, down 12 percent from this year’s high of $84.45. Commodities also have declined as the dollar strengthened, curbing investment demand for raw materials as an alternative asset. The U.S. Dollar Index , a six-currency gauge of the greenback’s strength, has added 1.4 percent this month after gaining 3 percent in December. Gold for immediate delivery fell 0.4 percent to $1,083.18 an ounce, down 1.3 percent this month. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, had dropped 1.9 percent this month as of Jan. 28, according to figures on the company’s Web site. Platinum, which is not in the GSCI index, has advanced 3.3 percent this month after an ETF fund was introduced in the U.S. Raw-sugar futures in New York have gained 8.6 percent this month as buyers including India, the world’s biggest consumer, compete for limited supplies. Feeder cattle, calves that are not ready for slaughter, have climbed 2.4 percent this month. Grain and soybean prices have declined this month after the U.S. Department of Agriculture raised its estimate of supplies. Corn futures have dropped 13 percent in January, wheat is down 11 percent, and soybeans have slumped 11 percent. To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

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Stocks in U.S. Fall Amid JPMorgan Retail Bank Loss; Dollar, Bonds Advance

January 15, 2010

By Rita Nazareth and Justin Carrigan Jan. 15 (Bloomberg) — U.S. stocks and commodities slid, while the dollar and Treasuries rose, as a loss at JPMorgan Chase & Co.’s retail bank and growing concern over Greece’s budget deficit triggered a flight from riskier assets. Crude oil fell for a fifth day. The Standard & Poor’s 500 Index lost 1.3 percent to 1,133.33 at 2:57 p.m. in New York, retreating from a 15-month high. The S&P GSCI Index of commodities extended its weekly decline to 4.2 percent, the biggest since October. The dollar strengthened against 15 of 16 major currencies, gaining as much as 1 percent versus the euro, while the benchmark 10-year Treasury note yield slid 0.07 percentage point to 3.68 percent. JPMorgan lost as much as 3 percent as the first major U.S. bank to release fourth-quarter results also reported revenue below the average analyst estimate. European Central Bank President Jean-Claude Trichet’s warning yesterday that no member nation will get “special treatment” fueled concern Greece’s debt will be ineligible as collateral at the central bank. The cost of insuring Greek bonds from default was near a record. “Any disappointment will make people rethink their level of risk at this particular stage of the economy,” said Bruce McCain , chief investment strategist at Cleveland-based Key Private Bank, which manages $22 billion. “The credit issues here and outside the U.S. clearly have not been fully resolved. That area will be more vulnerable to disappointments.” Financials Lead Retreat Financial shares in the S&P 500 lost 2 percent for the biggest decline among 10 industries. Goldman Sachs Group Inc. and Bank of America Corp. fell at least 1.5 percent. Producers of raw materials in the index declined 1.4 percent as the stronger dollar reduced the appeal of commodities as an alternative investment. The euro dropped as much as 1.5 percent against the yen and 0.7 percent versus the pound. The Dollar Index, which gauges the U.S. currency against those of six major trading partners, climbed as much as 0.8 percent to 77.349 for its biggest gain in a month. The yield on the benchmark Greek two-year note jumped 11 basis points to 3.71 percent, the highest level in almost a year. Rating downgrades sparked a rout in Greece’s bonds in December as the budget deficit headed for 12.7 percent of gross domestic product, more than four times the European Union limit. Greece will present proposals to the European Commission today to lower the deficit to 8.7 percent by year-end. Credit-default swaps on Greek debt rose to 340 basis points, near a record reached yesterday, according to CMA DataVision prices. Europe, Asia The Dow Jones Stoxx 600 Index of European shares declined 0.9 percent. The MSCI Asia Pacific Index gained 0.4 percent to its highest level since August 2008. Commonwealth Bank of Australia, the nation’s biggest lender, jumped 2.3 percent in Sydney after saying first-half profit rose. The MSCI Emerging Markets Index slipped 0.4 percent. The Shanghai Composite Index advanced 0.3 percent as China’s foreign-exchange reserves increased to a record. Oil fell for a fifth day, its longest losing streak in five weeks. February crude fell 1.8 percent to $77.97 a barrel on the New York Mercantile Exchange and touched $77.70, the lowest since Dec. 24. The S&P GSCI Index of commodities fell for a fifth day, the longest losing streak in a month. March corn declined 2.5 percent to $3.715 a bushel in Chicago trading. Wheat and soybeans also declined. Copper fell 0.8 percent to $7,430 a metric ton on the London Metal Exchange. Lead lost 2.9 percent to lead a drop in industrial metals. To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net ; Justin Carrigan in London on jcarrigan@bloomberg.net .

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U.S. Stocks Fall Amid JPMorgan Retail Bank Loss; Dollar, Treasuries Climb

January 15, 2010

By Rita Nazareth and Justin Carrigan Jan. 15 (Bloomberg) — U.S. stocks and commodities slid, while the dollar and Treasuries rose, as a loss at JPMorgan Chase & Co.’s retail bank and growing concern over Greece’s budget deficit spurred a flight from riskier assets. Crude oil fell for a fifth day. The Standard & Poor’s 500 Index lost 0.9 percent to 1,138.12 at 10:28 a.m., retreating from a 15-month high. The S&P GSCI Index of commodities extended its weekly decline to 3.5 percent, the biggest since October. The dollar strengthened against 15 of 16 major currencies, gaining as much as 1 percent versus the euro, while the yield on the benchmark 10-year Treasury note slid 0.9 percent to 3.66 percent. JPMorgan lost 2.2 percent as the first major U.S. bank to release fourth-quarter results also reported revenue that trailed the average analyst estimate. European Central Bank President Jean-Claude Trichet’s warning yesterday that no member nation will get “special treatment” fueled concern Greece’s debt won’t be eligible as collateral at the central bank. The cost of insuring Greek bonds against default was near a record. “Any disappointment will make people rethink their level of risk at this particular stage of the economy,” said Bruce McCain , chief investment strategist at Cleveland-based Key Private Bank, which manages $22 billion. “The credit issues here and outside the U.S. clearly have not been fully resolved. That area will be more vulnerable to disappointments.” Financials Lead Retreat Financial shares in the S&P 500 lost 1.8 percent for the biggest decline among 10 industries. Goldman Sachs Group Inc. and Bank of America Corp. fell at least 2 percent. Producers of raw materials in the index declined 0.9 percent as the stronger dollar reduced the appeal of commodities as an alternative investment. The euro dropped as much as 1.5 percent against the yen and 0.8 percent versus the pound. The yield on the benchmark Greek two-year note jumped 15 basis points to 3.76 percent, the highest level in almost a year. Rating downgrades sparked a rout in Greece’s bonds in December as the budget deficit headed for 12.7 percent of gross domestic product, more than four times the European Union limit. Greece will present proposals to the European Commission today to lower the deficit to 8.7 percent by year-end. Credit-default swaps on Greek debt rose to 340 basis points, near a record reached yesterday, according to CMA DataVision prices. The Dow Jones Stoxx 600 Index of European shares declined 0.6 percent. The MSCI Asia Pacific Index gained 0.4 percent to its highest level since August 2008. Commonwealth Bank of Australia, the nation’s biggest lender, jumped 2.3 percent in Sydney after saying first-half profit rose. Emerging Markets The MSCI Emerging Markets Index slipped 0.1 percent. The Shanghai Composite Index advanced 0.3 percent as China’s foreign-exchange reserves increased to a record. Oil fell for a fifth day, its longest losing streak in five weeks. February crude fell 1.2 percent to $78.46 a barrel on the New York Mercantile Exchange. The S&P GSCI Index of commodities fell for a fifth day, the longest losing streak in a month. March corn declined 0.6 percent to $3.7875 a bushel in Chicago trading. Wheat and soybeans also declined. Copper fell 1.3 percent to $7,395.75 a metric ton on the London Metal Exchange, leading a drop in industrial metals. To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net ; Justin Carrigan in London on jcarrigan@bloomberg.net .

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Freeport Wins 38% Reduction in Copper Refining, Processing Fees From Japan

December 22, 2009

By Jae Hur and Chanyaporn Chanjaroen Dec. 23 (Bloomberg) — Freeport-McMoRan Copper & Gold Inc. , the world’s largest publicly traded copper producer, secured a 38 percent cut in calendar-year processing fees from Japanese smelters, according to two people familiar with the agreement. The company will pay $46.50 a metric ton and 4.65 cents a pound in so-called treatment and refining charges next year, the two people said yesterday, declining to be identified as the agreements aren’t public. Bill Collier , a spokesman for Phoenix- based Freeport, declined to comment in an e-mail. Copper in London has more than doubled this year as China’s imports rose to a record. The fees for producing metal from semi-processed ore, known as concentrate, were lower than estimates and usually drop when there is a shortage as smelters compete for supplies. “The difference between the availability of concentrate and the smelting capacity is still growing and that will continue for the foreseeable future,” Eleni Joannides, copper research manager at London-based research company CRU, said yesterday by phone. The global deficit of the raw material may rise fivefold to 1 million tons next year, Christine Meilton , an analyst at CRU, said Nov. 9. CRU had forecast the 2010 charges to be about or just less than $50 per ton and five cents per pound. Fees Down Next year’s fees are down from $75 a ton for smelting and 7.5 cents a pound for refining for calendar 2009 and from $50 and 5 cents for midyear contracts started July. Midyear contracts typically cover less than 20 percent of the smelters’ needs, according to Atsushi Yamaguchi , a Tokyo-based analyst at UBS AG. Freeport rose 49 cents to $78.45 in Dec. 22 New York Stock Exchange composite trading. The shares have more than tripled this year. Copper for delivery in three months fell $54 to $6,881 a metric ton on the London Metal Exchange. Treatment fees are expressed in dollars per ton of concentrate received and refining fees in cents per pound of copper contained in the concentrate. The fees are deducted from the price paid by smelters to miners for the concentrate. “Given current foreign exchange rate trends, copper prices and sulfuric acid prices, around 13 cents a pound may be the level at which the Japanese operators can remain profitable,” Yamaguchi said in a note on Nov. 6. The 13-cent-per-pound level is equivalent to $55 a ton and 5.5 cents a pound, he said. The shortage of concentrate emerged after China expanded smelting capacity, CRU’s Joannides said. “If smelters don’t get enough concentrate, they will have to shut,” she said. To contact the reporters on this story: Jae Hur in Tokyo at jhur1@bloomberg.net ; Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net .

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China to Boost Imports, Reserves of Key Resources Next Year, Ministry Says

December 22, 2009

By Bloomberg News Dec. 22 (Bloomberg) — China, the world’s biggest metal’s consumer, should increase imports and reserves of strategic resources in 2010, the commerce ministry said today. The increases should take place “at an appropriate time” and “unreasonable restrictions” on imports should be cleared, the ministry said in a statement on its Web site outlining goals for next year. It didn’t identify the resources or elaborate on the timing of purchases. Chinese state buying of raw materials for stockpiling in the first half helped lift commodity prices, with copper and zinc doubling this year. The government’s $586 billion stimulus plan also spurred buying, with imports of copper, soybeans and iron ore gaining to records. “This will include copper, iron ore and uranium in our view,” Kevin Ji , an analyst at metal trader Ningbo Sunhu Chemical Products Co., said today. “Current prices are not good for stockpiling such resources, though the government should step up doing so once prices are appropriate.” The State Reserve Bureau, which manages government stockpiles, has bought copper, aluminum, zinc, indium and titanium this year, Caijing magazine cited Yu Dongming, an official at the National Development and Reform Commission, as saying in June. The country was not expected to continue reserve buying amid market conditions at that time as previous purchases reached the objective of bolstering prices, the magazine cited Yu as saying then. Copper in London gained for a second day on optimism demand in China is increasing as the country’s imports of the metal rebounded from an 11-month low. Refined copper imports were 194,388 metric tons in November, up 15 percent from the previous month, the customs office said today. Three-month delivery copper added 0.1 percent to $6,939.50 a metric ton by 12:39 p.m. in Shanghai. — Tian Ying , Li Xiaowei . Editors: Richard Dobson, Jake Lloyd- Smith To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net ; Ying Tian in Beijing at ytian@bloomberg.net

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Gold Trades Near Record in Asia, Oil Climbs on Inflation, Dollar Weakness

October 6, 2009

By Kim Kyoungwha Oct. 7 (Bloomberg) — Gold traded near its record and oil advanced for a third day as investors bought commodities to protect their wealth on speculation the dollar will extend its decline and inflation accelerate. Gold for immediate delivery traded 0.5 percent below the record $1,043.78 yesterday as Asian stocks gained for a second day and the dollar was near the lowest level in almost two weeks against the euro. Australia unexpectedly increased interest rates yesterday on signs of strength in the economy. The Reuters/Jefferies CRB Index of 19 raw materials rose 13 percent this year, rebounding from its worst year in a half century, led by robust demand from China. The Baltic Dry Index , regarded by some investors as a proxy for shifts in commodity demand, posted a fifth consecutive gain, the longest winning streak in almost a month. “Eventually inflation will come; commodities always win in inflation,” said Ghee Peh , head of Asian mining research with UBS Securities Asia Ltd. in Hong Kong. “We’re going to have a weak dollar until the U.S. economy sorts out its problem.” Gold for immediate delivery traded at $1,038.50 an ounce at 11:51 a.m. in Singapore compared to yesterday’s record of $1,043.78. Crude oil for November delivery rose 63 cents, or 0.9 percent, to $71.51 a barrel, in electronic trading on the New York Mercantile Exchange. The dollar is coming under pressure as speculation that the Federal Reserve will trail other central banks in raising interest rates made the greenback less attractive. The dollar traded at $1.4704 per euro at 2:53 p.m. Sydney time from $1.4722 yesterday. Inflation Concern Gold has risen 18 percent this year as governments boost spending to pull their economies out of recession, sparking speculation rising money supply will debase paper currencies. “The uptrend remains intact given that rate hikes to come show inflation will build up, fanning demand for gold,” said Kim Jae Jun, a trader at Eugene Investment & Futures Co. in Seoul. Today’s move was a “minor consolidation,” and gold will rise to $1,100 an ounce by the end of 2009, Kim said. Newcrest Mining Ltd. , Australia’s biggest gold-mining company, paced producers’ gains, rising as much as 7.5 percent to A$35.40 on the Australian stock exchange. Lihir Gold Ltd. added as much as 6.1 percent to A$3.15. “There’s talk of inflation re-emerging and continuing weakness in the U.S. dollar, which suggests the gold price may well continue to climb higher,” said William Seddon , who helps manage about $300 million at White Funds Management in Sydney. Oil Gains Crude-oil futures, used by some investors to forecast trends in inflation, have soared 60 percent in New York this year. The “fragility of the U.S. dollar” was also supportive of the oil price, said David Moore , commodity strategist at Commonwealth Bank of Australia in Sydney. Among other commodities, three-month delivery copper fell 0.4 percent to $6,088 a metric ton on the London Metal Exchange. Corn for December delivery fell 0.2 percent to $3.575 a bushel in electronic trading on the Chicago Board of Trade, a day after gaining the most in three weeks to a two-month high. To contact the reporter on this story: Kyoungwha Kim in Singapore at Kkim19@bloomberg.net

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Yen, Bonds Advance as Central Banks Consider Withdrawing Stimulus Measures

September 25, 2009

By Justin Carrigan Sept. 25 (Bloomberg) — The yen and government bonds rose as central banks weighed withdrawing economic-stimulus measures that have helped buoy demand for riskier assets. The Japanese currency strengthened against all but one of its 16 most-traded peers tracked by Bloomberg as of 10:05 a.m. in London. European bonds advanced, driving the yield on the German 10-year bund to the lowest level in almost two weeks. The Dow Jones Stoxx 600 Index of European shares fell 0.4 percent after earlier gaining 0.1 percent. U.S. index futures fluctuated between gains and losses. Group of 20 leaders are meeting in Pittsburgh to discuss policy coordination and tighter banking regulation. Federal Reserve Governor Kevin Warsh said the U.S. may need to be as aggressive in reversing its actions to revive the economy as it was in starting. European Central Bank policy maker Yves Mersch said “timely preparation” is needed about when to raise rates and withdraw liquidity once money markets recover. “If the world starts to believe that we are moving on from crisis management mode, the market could get sensitive about the timing of the retreat from the abnormal level of intervention,” Jim Reid , a strategist at Deutsche Bank AG in London, wrote in a report. The yen rose most against the Canadian dollar, adding 1 percent. It climbed 0.7 percent versus the U.S. dollar and 0.6 percent compared with the euro. The pound fell against 15 of the 16 most-traded currencies, losing 0.9 percent versus the yen. Gilts Lead Gains U.K. gilts led gains in government bonds, with the yield on the 10-year note dropping 4 basis points to 3.65 percent. The yield on the German 10-year bund declined 2 basis points to 3.28 percent, while the U.S. 10-year note yield fell 1 basis point to 3.36 percent. The U.S. government and the Fed have spent, lent or committed more than $12 trillion in an effort to revive the economy and credit markets. Germany yesterday reduced its fourth-quarter debt-sale program, citing “improved funding conditions.” Declines in shares extended the Stoxx 600’s weekly slump to 2.4 percent. Europe’s regional gauge has retreated as the index traded at 49.5 times the earnings of its companies, the most expensive level since 2003. Julius Baer Holding AG slumped for a third day, losing 5.8 percent in Zurich. The Swiss bank dropped after giving strategy updates for the private-banking and wealth-management businesses into which it will divide itself. Nomura Slumps The MSCI Asia Pacific Index slid 1 percent. Nomura Holdings Inc., Japan’s largest brokerage, tumbled 16 percent, the steepest one-day decline since at least 1974, after announcing a record 511.3 billion yen ($5.6 billion) share sale to fund expansion abroad. Futures on the Standard & Poor’s 500 Index added 0.1 percent after earlier falling 0.2 percent. A report today from the Commerce Department may show orders for U.S. durable goods rose in August for the fourth time in the last five months, economists said. New-home sales probably rose 1.6 percent to a 440,000 rate. “If ‘whatever it takes’ was appropriate to arrest the panic, the refrain might turn out to be equally necessary at a stage during the recovery to ensure the Federal Reserve’s institutional credibility,” Warsh wrote in an opinion piece posted late yesterday on the Wall Street Journal’s Web site. Zloty Drops The MSCI Emerging Markets Index slid 0.2 percent. Turkey’s benchmark ISE National 100 Index retreated 1.1 percent, led by a 6.6 drop in Dogan Yayin Holding AS after the tax office requested the country’s biggest media group provide 4.8 billion liras ($3.2 billion) in collateral within 15 days to cover alleged back-taxes, fines and interest. Poland’s zloty led emerging-market currency declines, weakening 0.7 percent to the lowest level in two months against the euro. Crude oil for November delivery climbed 37 cents, or 0.6 percent, to $66.26 a barrel on the New York Mercantile Exchange, after tumbling more than 8 percent during the previous two days on larger-than-expected increases in U.S. fuel stockpiles. European Union carbon permits rose, snapping a three-day decline, after the European Commission yesterday pledged to prevent extra supply of credits following a court ruling earlier this week overturning pollution limits on Poland and Estonia. EU December permits added 2.7 percent to 13.13 euros a metric ton on London’s European Climate Exchange. Tin climbed the most among industrial metals on the London Metal Exchange, rallying 0.9 percent to $14,500 a metric ton. Copper added 0.7 percent to $6,000 a ton. Aluminum slid 0.9 percent to $1,824 a metric ton, almost a two-week low. To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net

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Aluminum Prices `Particularly Exposed’ as Clunkers Plans End: Chart of Day

September 10, 2009

By Claudia Carpenter Sept. 10 (Bloomberg) — Aluminum prices are “particularly exposed” to a decline because vehicle sales are likely to shrink as government “cash for clunkers” programs end, Standard Chartered Plc said. The CHART OF THE DAY shows aluminum rallied in June and July as a clunkers program drove U.S. sales to their first monthly gain since 2007 in August. The U.S. program ended last month. Germany’s 5 billion-euro ($7.3 billion) clunkers fund, the world’s largest, ran out of money a week ago. Car sales rose for a seventh consecutive month in August from a year earlier, the country’s main auto-industry association, VDA, said. “After a surge in car sales in many major countries, the next few months are likely to be disappointing,” Daniel Smith , a Standard Chartered analyst in London, wrote in a Sept. 7 report. “The U.S., in particular, is likely to fall back sharply in September.” Aluminum has gained 23 percent this year in London, rebounding from two consecutive annual declines. Supply of the metal will outpace demand this year and next, Barclays Capital said Aug. 18. Stockpiles in warehouses monitored by the London Metal Exchange have almost doubled this year, reaching a record 4.63 million tons on Aug. 20. Aluminum for delivery in three months will average $1,550 a metric ton in the fourth quarter, Smith forecast. The median of 15 analysts surveyed by Bloomberg is for an average of $1,639. The metal closed at $1,895 on Sept. 8 and averaged $1,821 so far this quarter. An average North American passenger car uses 319 pounds (145 kilograms) of the metal, according to the Aluminum Association in Arlington, Virginia. (To save a copy of the chart, click here.) To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

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China Says Iron Ore Producers `Distorted’ Market With Massive Spot Sales

July 30, 2009

By Bloomberg News July 31 (Bloomberg) — China , the world’s largest consumer of iron ore, said suppliers of the steelmaking material have “distorted” the market and disrupted annual contract talks by “massive” selling on the cash market. Spot iron ore accounted for about 83 percent of imports this year, the China Iron & Steel Association said today in a statement issued in Beijing

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China Sparks Drop in Emerging-Market Stocks; Oil, Commodities, Ruble Fall

July 29, 2009

By Gavin Serkin and Laura Cochrane July 29 (Bloomberg) — Chinese stocks plunged the most in eight months, dragging emerging markets lower, on concern this year’s rally has outpaced prospects for earnings growth. Oil led a drop in commodities

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Aluminum Rises for 11th Day, Heading for Longest Gain in at Least 22 Years

July 28, 2009

By Anna Stablum July 28 (Bloomberg) — Aluminum rose for an 11th day, the longest advance in at least 22 years, on signs of increased demand from manufacturers. Nickel climbed to a 10-month high. Aluminum has jumped 19 percent since July 13 on speculation automobile manufacturers will need more of the metal in the current quarter as growth in supplies slows. Japan’s shipments of aluminum rolled products dropped at the slowest pace in seven months in June as demand from can and carmakers gained, the Japan Aluminium Association said in a statement today.

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Dollar Falls on Signs Slump Easing; MSCI World Index Advances for 12th Day

July 28, 2009

By Justin Carrigan July 28 (Bloomberg) — The dollar fell and stocks advanced for a 12th day as investors bought higher-yielding assets on speculation improved earnings signal the recession is easing.

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