March 29, 2010

Dear Friend,

Last week Shanghai copper inventories fell for the first time in 9 weeks, and combined exchange copper stocks fell 19,937 tonnes in an encouraging manner.  February Chinese daily steel output set a new record by 6% and aluminum output set a record by 5%, suggesting economic strength even in the New Year month.

 

The dollar strengthened against every currency and resource currency we reference last week, perhaps for the first time since the onset of the world recession.

 

Michael Marley, the American Metal Market scrap editor, reported strong export demand for U.S. scrap at $25-$50 above March AMM prices.  A Brazilian pig iron cargo shipped at $480 from Brazil and $505 delivered New Orleans suggests most of the rise in scrap steel prices has been accepted into the U.S. market for April delivery.  A collapse in steelmaking ingredient prices does not appear in the cards for new pending April prices, but the balance of warm weather in the Summer remains.

 

In general, global economic growth benefiting metals cyclical commodities appears to continue nicely.

Faithfully 

 

John C. Tumazos