Commodity Blog

Archive for March, 2009

Growing economic uncertainty related to the current global economic recession as well as the prevailing volatile financial market conditions, which have so far influenced investors to buy gold, could set off another gold market rally that could take the price above the $1,000/oz mark, according to CPM Group’s Gold Yearbook 2009.
The detailed analysis of the gold market, which is bounded into a hard-cover book, has been released Tuesday by the CPM Group — the New York-based metals consultancy.
“Gold, which has played a monetary role for centuries, appears to be enjoying a rehabilitation of its historical might and role as a financial asset, as investors look toward safe haven assets in these volatile times,” CPM noted.
In the Yearbook, CPM discussed the concept that gold, which is now in the ninth year of a major period of historically high investment demand for gold and consequently rising prices, is undergoing a secular upward move in both investor interest and prices. Yearbook 2009 puts forth the thesis that the rise in investor gold buying and prices since 2001 reflects a restoration of gold as a significant component of financial assets worldwide.
“The gold market appears to be in the early stages of a secular, long-term shift in which gold is reclaiming at least a portion of its status as an important financial asset used by institutional and individual investors, and governments worldwide as a form of savings and a financial asset,” CPM noted in the yearbook. “Gold is moving back to the status it had for most of the past five millennia. Gold has lost status as a financial and monetary asset over the past four decades. Now it is reasserting itself.”
GOLD SUPPLY SEEN RISING FROM INCREASED MINE OUTPUT, GOLD RECOVERY
In discussing gold supply and demand fundamentals, CPM has estimated that total supply of gold rose 3.3% to 114.8 million oz in 2008 from 111.1 million oz in 2007, and could rise further to 118.6 million oz in 2009.
Mine output declined further last year, reaching 55.3 million oz from 58.7 million oz the previous year, said CPM, adding that mine production may rise to 57.2 million oz this year.
Secondary supply of gold, recovered from various types of discarded jewelry and other scrap, soared to 38.5 million oz in 2008 from 32.4 million oz in 2007 and is projected by CPM to rise further to 40.5 million oz this year. Sales from “transitional” economies is pegged at 21 million oz.
Fabrication demand for gold has declined overall since 2001, partly reflecting the rise in gold prices. Last year, fabrication demand — consisting mostly of jewelry, electronics, dental and medical uses — declined to 77.4 million oz from 82.9 million oz the previous year. This year total demand is projected to fall further, to 71.3 million oz, with jewelry demand declining to 56.5 million oz from 60.8 million last year. Industrial demand, meanwhile, could decline to 14.8 million oz this year from 16.6 million oz last year.
Turning to gold sales from central banks and other government sources, the CPM Yearbook noted that in 2008 official sales fell to 5.8 million oz from 15.9 million oz in 2007. This reduced the total available supply to the gold market to 120.7 million oz from 127.0 million oz in 2007. This year official sales may be no more than 5 million oz and total available supply may be 123.6 million oz.
“Most central banks may have sold much of the gold that they have wanted to sell over the past two decades,” said CPM. “They may sell much less going forward and are likely to sell less given current economic conditions. The Gold Yearbook discusses official transaction trends and also speaks to the recent proposal to sell gold by the International Monetary Fund.”
According to CPM, investors continued to buy large quantities of gold last year, with total purchases of bullion reaching 43.3 million oz, compared with 44 million oz in 2007.
“Amid the continued inclination to acquire safe-haven assets around the world, investor buying is projected to reach a record 52.3 million oz this year,” said CPM. “Continued volatile and weak financial and economic conditions are expected to be supportive of strong investment demand this year as well. Combined with short term and speculative activity, gold prices are expected to surpass last year’s record intra-day high of $1,033.90, seen on March 17, 2008.

Asian investors beating a path to B.C. mining and exploration companies as economic landscape yields bumper crop of bargains by Krisendra Bisetty

China’s largest iron and steel company is leading a charge into resource-rich B.C., scouting for bargains amid a global slump in commodity prices and company values.
“The Chinese have been through several times in recent weeks looking to see what’s available,” said Pierre Gratton, president and CEO of the Mining Association of B.C. “I think we’ll see more of that.”
Many mining and exploration companies are trading below their cash value, providing an alluring incentive for the world’s biggest commodity consumer to cherry-pick deals.
“There are some projects out there that could potentially be more affordable than when commodity prices were going through the roof, like they were a year ago,” said Gratton, whose association represents the interests of operating coal, metal and industrial mineral mining companies. “We’re not in a position to tell them which companies to go after, but they come asking questions about the general state of mining. They’re looking for opportunities.”
Among them is Tangshan Iron & Steel Group, whose merger with Handan Iron and Steel Group last year created China’s largest steel company.
While not a steel producer, B.C. is Canada’s only producer of molybdenum, which is used to strengthen the metal. The province is also Canada’s largest exporter of coal, a key ingredient in steel-making.
“They’re very interested in producing mines or those close to production and in almost anything, from iron- ore to copper to nickel to zinc, as long as it’s a reasonable price,” Michael Chen, founder and managing director of DoubleOcean Financial Group, said in an interview from China.
The Vancouver-based advisory company, which also has offices in the U.S and China, specializes in helping North American companies expand into China and Chinese companies in their efforts to go global. Chen said the Chinese prefer to buy assets outright, although they’re keen to invest in local companies.
As a global hub for mining and mineral exploration companies that have projects around the globe — approximately 850 mining development and exploration company offices are located in Vancouver — there’s more than one reason for the Chinese to come calling.”There are deals to be had,” said Gratton.He added that while China is not immune to the effects of a global economic slowdown, its growth in gross domestic product is still at a healthy 6%.
“There’s still money in China. There are still a lot of companies in China with money.”
And that’s what Canadian mining and exploration companies desperately need.
The sobering numbers were presented in a recent report by auditing and advisory firm Ernst & Young. In January, according to the report, 28 of the top-100 Canadian mining companies had less than $25 million in the bank.
For some, that’s more than their market capitalization after share prices started their downward spiral in the middle of 2008 as the global economy slowed and demand for commodities began to fall.
Add in a tough financing environment, and companies are happy to bring partners on board.
“There’s been a multiple-fold number of inquiries and requests for assistance in trying to find some international investors,” said Duncan Wright, a trade commissioner with Foreign Affairs and International Trade Canada.
He added that in spite of the economic downturn, there’s been a spike in Chinese interest in Canada’s raw materials.
“We’re seeing very, very high numbers of inquiries and interest.”
Scores of Chinese delegates were at the Prospectors and Developers Convention in Toronto earlier this month trying to find worthy projects, but the government trade commissioners’ office has also been funnelling potential Chinese suitors to stakeholders in B.C.
“China is growing massively, and Canada is recognized as a great place for getting raw materials, processing them here and exporting them abroad,” said Wright. “And it’s also a very stable environment to invest in and develop mining projects.”

Gold N.Y. Spot $ 923.25
Silver N.Y. Spot $ 13.39
Lead LME Cash $ 0.5674
Copper LME Cash $ 1.7740
Zinc LME Cash $ 0.5543
Nickel LME Spot $ 4.37
Aluminum LME Spot $ 0.6210
Platinum N.Y. Spot $ 1116.50
Palladium N.Y Spot $ 208.00
Oil WTI Cushing $ 052.70
Natural Gas (Henry Hub)($/MMBtu) $04.17

USD-AUD $ 1.4308
AUD-USD $ 0.6989
CAD-USD $ 0.8115
USD-CAD $ 1.2323
EUR-USD $ 1.3539

Xstrata forecasts mineral production cutbacks will lead to shortages and higher prices MINING group Xstrata on Friday said cutbacks in mineral production in response to the global recession could come back to haunt buyers as prices rise significantly due to shortages once demand recovers in response to a raft of stimulus measures implemented to deal with the global recession.
Commodity prices have plummeted due to flat demand as major consuming countries grapple with the worst global recession in more than six decades.
CE Mick Davis said major and junior miners had been forced to slash capital expenditure and postpone expansion projects due to uncertainty about the future.
He said further delays to add new production capacity to replace ageing mines were providing the perfect conditions for a shortage of commodities, which could result in ”significant price increases” once global industrial production and demand for commodities resumed their long-term growth trend.
Mining firms, some with operations in SA such as Xstrata and Anglo American, have drastically cut back on production, and announced plans to reduce staff in addition to implementing cost-saving measures to survive the economic downturn.
Xstrata recently announced that in response to weaker demand for ferrochrome, its Xstrata-Merafe chrome venture had progressively suspended the operation 17 ferrochrome furnaces in SA, which was equivalent to 80% of annual production capacity, prioritising lower cost, energy-efficient production from the Lion and Lydenburg Premus smelters.
Anglo also announced a 10% cut in its global workforce, which would be reduced by 19000 by the end of the year as part of a drive to save up to $2bn annually between now and 2011.
Writing in Xstrata’s annual report for last year, Davis, however, said there was a glimmer of hope that measures taken by governments in Europe, Asia and US could provide the stimulus to revive economic growth, which would benefit mining firms.
He estimated that stimulus packages announced in major commodity-consuming countries such as China, Japan and the US exceeded $1,7-trillion, which, together with loosened monetary measures to encourage growth, were expected to ease economic conditions, laying the perfect ground for miners to start increasing production.
“A very significant proportion of this total — for example, more than 70%, or $400bn, of China’s total investment — has been earmarked for metals-intensive infrastructure investment and is consequently expected to bolster demand for commodities.
“When Organisation for Economic Co-operation and Development economies return to a growth phase, the effect of demand growth, coupled with greater commodity supply constraints, has the potential to lead to a rapid increase in commodity prices and demand,” Davis said.

One of the most anticipated, and well-attended, sessions in this year’s PDAC convention in Toronto was headlined Commodities and Market Outlook. The intense interest is understandable. After brutal price declines in many commodities, delegates were anxious to know what’s in store, and in particular whether there was any prospect for a recovery.
While the market for each commodity is different, observers see markets remaining weak for most of the year, only starting to exit the doldrums next year.
Alan Williamson of Galena Asset Management in London set the tone with a market overview, saying that developed countries are in a period of weaker growth, so emerging economies will need to lead the recovery. On the positive side, global industrial output is close to bottoming, although Williamson only expects a tepid recovery.
And because inventories are building, prices have been pushed down near production costs. Williamson expects prices to remain weak in 2009–10 as governments reflate the financial system through 2011. Although downside is limited from these price levels, prices are also unlikely to rise while oversupply persists.
Underlying the severity of the recession, Williamson says that this year will be the first since World War II in which the global economy contracts. The downturn is most pronounced in developed countries, which are pulling down emerging economies too.
Paradoxically, the weak state of credit markets sets the stage for a future recovery in commodity prices, since the ”lack of project financing is impacting future commodities supply,” according to Williamson. The delays and cancellations in multiple projects should ensure a long-term recovery.
As so vividly demonstrated by the crash in auto sales, U.S. consumers are cutting back on spending, likely ushering in a protracted period of sub-trend growth, Williamson forecasts. The credit crisis has strengthened the greenback, historically a negative for commodities, but this relationship explains commodity price movements only partially, and it does not affect all commodities equally, with the strongest influence felt on the gold price.
The slowdown in China was made worse by government tightening in early 2008, and the government is now reversing this policy. Williamson sees recovery in Chinese construction as key to commodity markets.
Global industrial production is down, showing a 7% decline year-on-year in December. The slowdown has triggered a collapse in metal demand, further amplified by destocking.
Industrial downturns are nothing new, Williamson says, and growth always returns eventually. But this downturn is unusually harsh, with developed economies declining by 10% from the peak in January 2008. The best-case scenario would be for the economy to hit a trough in April-May, and start recovering thereafter. This would see global industrial production shrinking by 7.5% year-on-year in 2009, followed by a 10.6 % growth in 2010.
But a more likely scenario would see a lukewarm recovery followed by another dip in industrial production. Under this slower recovery scenario, global industrial production would shrink by 7.6% year-on-year in 2009, followed by a muted 4.8% growth in 2010.
The recession has shifted base metal markets into surplus which will persist in the short term despite cutbacks to production on many mines. Williamson sees the aluminum market moving into balance only in 2012. The copper and zinc markets look firmer, and are anticipated to move into deficit that year. Williamson’s most surprising forecast sees the lead market moving into deficit as early as next year.
He summarizes by saying that the trough of the recession is probably close, anticipated to arrive in the second quarter. Commodity prices should bounce as extreme pessimism passes, but the recovery will probably disappoint. Recovery in China will be key to commodity demand.
Fundamental improvement is still some way off: Williamson expects that it will arrive only in 2011. Commodity inventories would continue to rise as markets remain in surplus. Excess capacity would overhang the market for some time, forcing producers to maintain production cuts.
Andrew Keen, senior analyst at Sanford Bernstein, who spoke about copper, said that copper prices show an inverse relationship to inventory levels. The lower inventories go, the higher prices tend to be pushed. But as inventories rise, they tend to push copper prices down to the marginal cost of production.
Keen says that this decade has seen poor copper supply growth. One of the reasons is a decline in head grades. Keen estimates that between 1996 and 2008, average copper head grades declined from 1.37% to 1.01%. Another factor weighing on copper supply is earthquake activity in Chile.
Turning to the demand side, Keen estimates that 2008 copper demand from developed economies was 7.1 million tonnes, and from developing economies 11.4 million tonnes, for a total of 18.5 million tonnes. For 2009, he sees a 3.7% decline from that level. But he also forecasts that demand will snap back in 2010, recouping this year’s declines, and bringing 2010 demand back near 2008 levels.
Copper demand has not been destroyed as badly as expected. Coupled with constrained supply, this should limit surpluses. Keen predicts copper prices to average US$1.65–1.67 per lb. this year.
Keen seems none too impressed with the production potential from projects slated to come on line by 2017. Every proposed project has problems, such as political risks, large capital costs etc. Potential projects look high risk and low quality.
However in the short term the market remains in surplus, and Keen forecasts that it will likely get worse before it gets better. He sees a 500,000 tonnes surplus this year, falling to 150,000 tonnes next year.
As positives for the copper market Keen counts modest hikes in inventory, a poor project pipeline, and project deferrals and delays.
Keen expects copper to be one of the strongest commodity performers once the current down-phase passes. “We believe that copper will be relatively well positioned amongst metals for the recovery phase of the current cycle,” he says.
The zinc market was reviewed by Mark Patell of Xstrata Zinc. With zinc being used mostly in the automotive and construction sectors, demand is closely tied to the state of the global economy.
Patell sees a strong supply-side response to the recession. He estimates that zinc supply will be cut by 9% this year, exacerbating future supply deficits when demand growth returns.
But the most important underlying trend remains the population growth and urbanization in the developing economies. Increasing GDP growth per capita implies increasing metal consumption. Patell concludes that the long-term positive demand trend for commodities remains intact.
Patell’s talk did not include projections, so it is interesting to look at forecasts from a third party such as metal consultants GFMS. The London-based company sees a surplus of 210,000 tonnes zinc this year, but this will occur in the first two quarters, with the market moving to a small deficit in the second half of the year.
Zinc prices are seen retreating from US$1,250 per tonne, but the downside is anticipated to be limited to around US$1,100 per tonne. Prices are projected at US$1,200 per tonne in the third quarter, rising to US$1,300 per tonne in the fourth quarter. Prices next year are seen in a range of US$1,100–1,800 per tonne, with an average of US$1,550 for the year.
Turning to iron and steel, Phil Newman of CRU Strategies does not paint a rosy picture for the steel industry in 2009, projecting an 8% decline in hot metal production, or 65 million tonnes down. The impact on iron ore demand is profound, with demand falling 20 million tonnes in 2008, and a projected 100 million tonnes in 2009.
Newman expects this to weigh on prices, with prices of iron ore fines in Hamersley, Australia, anticipated to fall 25% year-on-year in 2009, to about US$109 per dry metric tonne unit (DMTU) from about US$145 last year. (Dry metric tonne unit is one tonne of contained iron.)
But Newman sees the market approaching an inflection point: a decline in domestic iron ore production in China owing to declining grades, rising costs and falling prices, which together are making some mines uneconomic.
Looking to 2010 and beyond, Newman sees a strong rebound in steel production. For example, in 2010 he anticipates production to rebound by roughly 7%, to about 1.3 billion tonnes, almost back to 2008 levels. And once the rebound train starts moving, there is no stopping it, with steel production growing about 6.5% in 2011, 5% in 2012 and 4% in 2013. Newman forecasts that, in 2013, steel production will exceed 1.5 billion tonnes.
This translates to higher iron ore demand, forecast to increase by about 100 million tonnes in 2010 and 110 million tonnes in 2011. Demand would continue to increase, albeit at a more moderate pace, rising by about 80 million tonnes in 2012, and by roughly 65 million tonnes in 2013.
The trend would be replicated in seaborne iron ore. After a projected 5% decline in 2009, it is anticipated to rebound by 10% next year. Again, the trend is forecast to continue, with 2013 seaborne iron ore projected to be 330 million tonnes higher than 2007 levels.
Meanwhile, iron ore exports from India are forecast to collapse to 40 million tonnes this year from 100 million tonnes in 2008. Tonnages would start recovering slowly in 2010, but are projected to reach about 70 million tonnes in 2013, well below 2008 levels. As a result, Australia and Brazil will step in, increasing their market share at India’s expense.
Newman concludes that “the party will continue, although the music has been turned down.”
In his talk about the uranium market, Greg Barnes of TD Newcrest pointed to a number of factors acting in the market. The credit crunch has caused forced selling by investors. Meanwhile, requirements from utilities are well-covered through 2010. Lacking an incentive to buy, utilities have been sitting on the sidelines. Although mine supply continues to miss targets, there are no supply shocks. India is re-entering the market as a buyer, increasing demand.
With a benign supply-demand picture, the U.S. Department of Energy has announced plans to sell surplus uranium. Barnes concludes that the short term will see a balanced market or a surplus.
Meanwhile, long-term supply is still a concern, with start-up dates of major projects (Cameco’s (CCO-T, CCJ-N) Cigar Lake project in Saskatchewan, and BHP Billiton’s (BHP-N, BLT-L) Olympic Dam mine expansion in Australia) still unclear. But Kazakhstan has been increasing production.
Barnes projects prices rising to US$60 per lb. uranium oxide in 2009 from US$42.50 at presstime. Prices are projected to rise further to US$70 in 2010, declining to US$60 in 2013, and US$50 in 2014 and 2015.
Jim Steel, an analyst with HSBC securities, covered the gold and silver markets. Steel points out that, with the exception of rice and cocoa, gold was the best performing commodity in 2008. And this performance was against a backdrop of declines in most other asset classes.
Steel concludes that gold is an excellent safe haven and portfolio diversifier, having proven itself as a hard asset during the credit crisis. As demand for other commodities declined, demand for gold increased, seen as a safe haven. And holdings of gold ETF’s (exchange-traded funds) have proved stable.
Steel says that if the U.S. Federal Reserve embarks on a policy of quantitative easing, money supply could grow, weakening the U.S. dollar and providing support for the gold price. This could happen despite lower inflationary expectations, with HSBC expecting global consumer prices to rise only 0.7% this year.
Meanwhile, the supply side is challenged. Mine supply stood at almost 2,450 tonnes gold in 2007, declining to about 2,430 tonnes in 2008, and to an estimated 2,400 tonnes in 2009. Jewellery demand is estimated to absorb 2,250 tonnes this year.
Shifting to the silver market, Steel says that with growing silver holdings in ETF’s, demand from ETF’s has become an important factor in the market.
The silver price does not affect mine production strongly, since most silver is a by-product of copper, zinc and gold mines. Steel projects an increase of 15 million oz. in silver production in 2009, to 695 million oz.
Most of the industrial consumption of silver goes to electrical and electronics applications. The slump in semiconductor sales implies lower industrial demand for the metal.
Steel estimates that mine supply will exceed industrial demand for silver by about 90 million oz. in 2009, with the difference taken up by investment demand, leaving silver vulnerable to changes in investor sentiment.
Moving to the platinum market, Tom Kendall of Mitsubishi points to the collapse in auto sales, where platinum is used as a catalyst, as the main factor behind the decline in demand. However, jewellery demand, which is price-sensitive, has picked up some of the slack. Investment demand is increasing, with rising platinum holdings in ETF’s.
Mine supply is highly concentrated, with about 75% coming from South Africa. Supply has responded to the crash in prices. Kendall estimates supply at 6.2 million oz. in 2009, 1 million oz. less than the number projected a year ago.
Kendall sees a number of challenges on the supply side, including falling grades, infrastructure problems and higher royalties. He says that the supply of scrap is correlated to prices.
Kendall sees a slow recovery in the auto sector, implying a slow recovery in platinum demand. But he also sees a number of positives for the market, including a slow supply response from mines, the possibility of a rebound in demand from China, stricter vehicle emissions standards, and low inventories.
Kendall forecasts an average platinum price of US$1,080 per oz. this year, with a possibility of a strong rally in the fourth quarter. He believes that the platinum price is unlikely to remain below US$1,200 per oz. for an extended period.
Dudley Kingsnorth of Industrial Minerals Company of Australia threw some light on an obscure group of commodities known as rare earth metals. He estimates 2008 demand at 124,000 tonnes valued at US$1.25 billion, and projects demand increasing to 200,000 tonnes in 2015, valued at US$2–3 billion. Depending on the metal, prices average US$9–11 per kg.
China is the main supplier, and government-imposed constraints on exports are causing companies to evaluate projects outside China.
Kingsnorth forecasts that by 2015, demand for dysprosium, terbium and yttrium will be higher, with prices for the three metals anticipated to be firm. Demand for neodymium and lanthanum, currently in balance, may also increase. But the market for cerium is showing a surplus, and is anticipated to remain over-supplied.

Gold N.Y. Spot $ 952.75
Silver N.Y. Spot $ 13.55
Lead LME Cash $ 0.5906
Copper LME Cash $ 1.7740
Zinc LME Cash $ 0.5579
Nickel LME Spot $ 4.49
Aluminum LME Spot $ 0.6500
Platinum N.Y. Spot $ 1116.50
Palladium N.Y Spot $ 205.50
Oil WTI Cushing $ 051.80
Natural Gas (Henry Hub)($/MMBtu) $03.67

USD-AUD $ 1.4474
AUD-USD $ 0.6909
CAD-USD $ 0.8114
USD-CAD $ 1.2325
EUR-USD $ 1.3587

Tight credit is dampening copper-industry consolidation, even though some companies could be had cheaply right now.
Comex May copper closed at $1.6890 a pound, up nearly 10% for the week on Chinese-demand optimism and inventory declines. However, with the metal’s price off about 60% from last year’s record high, some producers may be feeling the squeeze enough to sell, quite likely at bargain values.
But the companies that might otherwise be in a position to buy are more focused on shoring up balance sheets, as the global economic downturn dents demand for their product. The credit-market crunch means few companies have money to spend on acquisitions, says Charles Bradford, equity analyst at Soleil-Bradford Research. And those that do have the cash are hoarding it.
To be sure, there are flutters of consolidation activity. Low copper prices are leading Norddeutsche Affinerie (ticker: NDA.XE), Europe’s biggest copper producer, to consider acquisitions in the European copper-fabrication market, as well as potential buys in South America and China, says Chief Executive Bernd Drouven. Sherwood Copper and Vancouver-based copper producer Capstone Mining (CS.Canada) merged in September. Frontera Copper (FCC.Canada) last month recommended that its shareholders accept an acquisition bid from Mexican investment firm Invecture Group, which bettered a competing offer from Grupo Mexico (GMEXICO.Mexico).
Among other factors crimping mergers and acquisitions is that producers are still eking out profits despite lowered prices. Falling input costs, such as oil and sulfuric acid, have helped. Still, “there is probably going to be some consolidation of the sector,” says Thomas Winmill, portfolio manager of the Midas Fund (MIDSX). For those acquisitions that do happen, bigger players would be more able to pay cash. Smaller-company activity would probably take the form of mergers of equals, Winmill says. He adds that he wouldn’t be surprised if Anvil Mining (AVM.Australia) — which in September had to scrap a private capital-raising because of poor market conditions — agreed to be acquired by a larger company. He says Capstone may be open to more corporate activity, and Equinox Minerals (EQN.Canada) might be attractive for a major.
Companies with relatively strong balance sheets are probably willing to wait out the lower prices, while those with weaker balance sheets and cash flow might be more open to being acquired, said Brian Hicks, co-manager of U.S. Global Investors’ Global Resources Fund (PSPFX). But they may have a hard time finding buyers. Mining companies are taking into consideration weak copper demand, multiyear lows for equities and swooning manufacturing. They aren’t looking to stretch their balance sheets on acquisitions, and will probably sit on the sidelines until the economy perks up and stronger prices emerge.
With this backdrop, large miners like Rio Tinto (RTO) and Xstrata (XTA.U.K.) aren’t likely to be shopping anytime soon, Hicks says. M&A activity probably won’t pick up until the second half of this year at the earliest.
“A lot of the large mining companies, like everyone else, are trying to pick themselves up off the mat,” Hicks says.
Rumination that recent OPEC cuts are tightening supplies lifted Nymex crude-oil; the April contract settled at $45.52 a barrel, up 1.7% on the week. Some also speculated that next week’s OPEC meeting would bring more cuts.

Gold N.Y. Spot $ 925.05
Silver N.Y. Spot $ 13.19
Lead LME Cash $ 0.5513
Copper LME Cash $ 1.6175
Zinc LME Cash $ 0.5357
Nickel LME Spot $ 4.33
Aluminum LME Spot $ 0.5720
Platinum N.Y. Spot $ 1065.50
Palladium N.Y Spot $ 198.00
Oil WTI Cushing $ 048.00
Natural Gas (Henry Hub)($/MMBtu) $03.94

USD-AUD $ 1.5788
AUD-USD $ 0.6334
CAD-USD $ 0.7774
USD-CAD $ 1.2863
EUR-USD $ 1.2628

Global miner Rio Tinto expects 2009 to be a rough year in terms of both prices and volumes for key commodities, the firm’s chief economist said on Wednesday.
Vivek Tulpule, speaking to Reuters on the sidelines of a conference, said a pick-up was possible in 2010, though people should not be blind to the risk of a prolonged slowdown.
Rio Tinto’s major commodities are iron ore, aluminium and copper.
“2009 will be a very rough year for both prices and volumes and probably also for construction. A lot of people I talk to in the mining industry are suffering a crisis of confidence, they are putting a lot of projects on hold,” Mr Tulpule said.
“Our view is that it will be a slow year or two.”
Copper, zinc, nickel and other industrial staples have lost 50 per cent or more in value since last year’s collapse in commodities markets.
For iron ore, analysts predict benchmark prices could contract by as much as 60 per cent this year due to sharp drops in orders from steel mills.
Mr Tulpule said benefits flowing from China’s giant economic stimulus package, largely directed at infrastructure, were likely to show up midway through the year.
“It will take to time to offset the negative impact of a downturn in exports and construction, those areas have slowed very fast,” Mr Tulpule said.
He said the collapse in commodities flowed from two “crunches”: the global credit crunch and a crunch in China that had been induced by its attempts to slow the economy last year because of concerns it was overheating.
“The effect that had was way beyond their own expectations and certainly beyond the expectations of anyone else,” Mr Tupule said.
“That deceleration had a profound effect on our markets as when growth decelerates inventories build up, and when you’ve got lots of inventory you suddenly decide not to build things and then you don’t need to buy half as much copper and aluminium and iron ore.”

Gold N.Y. Spot $ 911.05
Silver N.Y. Spot $ 12.93
Lead LME Cash $ 0.5003
Copper LME Cash $ 1.6057
Zinc LME Cash $ 0.5196
Nickel LME Spot $ 4.42
Aluminum LME Spot $ 0.5901
Platinum N.Y. Spot $ 1038.00
Palladium N.Y Spot $ 194.50
Oil WTI Cushing $ 044.60
Natural Gas (Henry Hub)($/MMBtu) $04.43

USD-AUD $ 1.5468
AUD-USD $ 0.6465
CAD-USD $ 0.7729
USD-CAD $ 1.2938
EUR-USD $ 1.2570