Its been another strong week on commodity markets with all LME traded metals recording strong gains. Since 31 August, USD LME Aluminium has risen 17%, USD LME Copper has risen 9.5% and USD Nickel has risen 13%. Unfortunately for AUD prices the AUD/USD has also increased from 1.02 to 1.05 negating some of the rise.
The justification for these large increases is somewhat shaky as it relies on improved economic activity and inflation flowing from the recent round of Government intervention into the financial markets. This is notwithstanding that the prior two government interventions both failed.
**** Managed money sharply boosts copper, gold length ****
Sept 14 (Reuters) – Hedge funds and money managers sharply raised their bullish bets on copper and gold futures on hopes monetary stimulus from major central banks would boost economic growth and fuel inflation. Under the program the Federal Reserve will buy a total of $600 billion of bonds under its new stimulus program announced Thursday, known as QE3, and will look for a U.S. unemployment rate of 7 percent before it halts the program, according to the median of forecasts from a Reuters poll.
**** Ghost warehouse stocks haunt China’s steel sector ****
SHANGHAI, Sept 17 (Reuters) – Chinese banks and companies looking to seize steel pledged as collateral by firms that have defaulted on loans are making an uncomfortable discovery: the metal was never in the warehouses in the first place.
China’s demand has faltered with the slowing economy, pushing steel prices to a three-year low and making it tough for mills and traders to keep up with payments on the $400 billion of debt they racked up during years of double-digit growth
**** China Cuts Rare-Earths Mine Permits 41% to Boost Control ****
China reduced the number of permits to mine rare earths by 41 percent, tightening production of the metallic elements used in batteries and magnets. China issued 67 mining licenses for rare earths and 10 exploration permits, the Ministry of Land and Resources said yesterday in a statement. The nation previously had 113 mining licenses, said Wei Chishan, a Shanghai-based analyst at SMM Information & Technology Co.