The Stalwart

Don't Forget About Liu

With rogue traders back in the news, I've been getting a lot more search hits from people looking for my favorite, Liu Qibing, the Chinese copper trader that briefly rattled the global copper market. According to Wikipedia, he's really not anywhere near the top. His loss was only around $200 million in the end. Weak.

Cost Of Making Steel Up 35-40% In 07

Obviously steel prices are immune to gravity... but on the off chance they ever come down, they could run into a cost floor than they have in the past than they have in the past:

As discussions centre on crude oil prices hitting $100 a barrel this week, steel portal www.steelonthenet.com has recalculated current steelmaking costs with the latest inputs prices for scrap, electricity, coal etc.

Even before the expected 2008 price increase for iron ore, steelmaking costs for a typical West European steelmaker have risen some 35-40% in the 12 months since January 2007. Electric arc furnace steelmaking currently costs approx $447 per tonne of liquid steel. BOF steelmaking currently costs $353 per tonne. The figures compare to costs of $321 and $262 respectively exactly one year ago.

Almost certainly, other heavy industry commodity players are seeing the same things. Imagine the cost of running a big oil exploration project right now. But with oil never stopping to take a breather on the way up, it's no big deal.

Top 10 Predictions For 08... Cattle Edition

You can find plenty of internet/tech predictions if you look around. Here are the top 10 cattle market predictions. What's #1? Feed Price Volatility. Somehow doesn't seem hard to believe. #6: More pork. Literally, as in hogs.

(via Thoughts From the Middle of Nowhere, a cattle rancher's blog)

Carried In The Finest Restaurants, I'm Sure

"The Great White Shark" Goes Red:

Pro Golfer Greg Norman, an Australian known as "The Great White Shark," has expanded his ranching and ag enterprises by introducing a line of premium Wagyu beef into the U.S. Called "Greg Norman Australian Prime," the line recently celebrated its first anniversary in the U.S.

Aggregate Demand For Aggregates

Pit & Quarry editor Mark Kuhar, who I once got to do an interview with, goes over the 2008 forecast for aggregates

Steel Glossary

A useful glossary of of steel terms courtesy of steel on the net:

Bloom: A semi finished steel product, larger than billet and typically cast to a square cross section of ~200 x 200 mm to ~360 x 360 mm (or as a round of ~300 mm diameter)

Teeming: The pouring of molten metal from a ladle into an ingot mould. The economic advantages of continuous casting over ingot casting mean that the ingot-route process has largely been superseded for high volume production of steel

Grain Theory

So wheat hit $10/bushel the other day, which is sort of like oil hitting $100. To be honest, I wouldn't have had any clue whether $10/bushel wheat was expensive or cheap until of the stories about it, and how it was such a big deal. On CNBC, they were talking about all of the other ag commodities that are making new highs these days. Seems like everything from almonds to juniper berries are expensive right now (do they gin makers have hedges in place?).

Anyway, here's what I was wondering. Is there the equivalent of Dow Theory when it comes to commodities? There's the theory that the various Dow indexes need to confirm each other. So if the industrials are making new highs, it matters what the Transports and Utilities are doing. Are there linked commodities that confirm or undermine each other depending on price action? And supposing all were making highs, are there certain commodities that would be expected to break down? I only ask cause this isn't an area that I've studied much, so do forgive if I sound like an idiot.

Metal Machine Music

My favorite new blog these days is MetalMiner, a blog about sourcing metals. I'm pretty much addicted to it, and if you're interested in metals, then you should be too. Here's the latest on the prospects for the aluminum market:

Higher costs for Bauxite, energy, and freight will severely limit the planned growth of output which has been expected to meet growing demand in the developing BRIC economies (Brazil, Russia, India, and China). In the same report, Macquarie Bank is reporting that some smelters around the globe are experiencing costs of around US $2500/mt (above today’s LME levels) due to this combination of high input costs.

Some 70% of the growth in aluminum production came from China over the last three years, but this too is set to change due to a combination of higher costs, export taxes, and government administrative changes. China becoming a net importer of aluminum during 2008/9 as new capacity is postponed, and unprofitable capacity is closed.

By the way, it's co-written by the wife of Jason Busch, who writes the blog SpendMatters, another favorite. Here's some more on it.

Good Ol' American Jobs

Steel jobs are here again:

Retirements are looming at the steel plants along the Lake Michigan shoreline as the baby boomers hired in their late adolescence and early adulthood when the industry was booming begin to qualify for pensions.

It's estimated that more than half of the region's hourly and salaried steel industry workers will be eligible for retirement by 2012, creating plentiful job openings in the coming years.

U.S. Steel Corp.'s Gary Works is seeking 27 salaried employees for a range of positions, and 250 hourly workers, said company spokesman John Armstrong, adding a large number of employees will be eligible to retire in the next five years.

(via Stamping out a Living)

Awesome Drama

Will Rio Play Pac-Man?

There is a potential new character on the scene of the globe-spanning mining takeover battle: Pac-Man.

British mining giant Rio Tinto PLC, fighting off an unsolicited $131.57 billion takeover bid from Australian rival BHP Billiton PLC, is considering turning the tables on its rival and launching a counterbid for BHP, according to people close to the matter. The gambit is called the Pac-Man defense, and has a relatively checkered history in the annals of mergers-and-acquisitions maneuvers.

Yes, but regular Pac-Man or Ms. Pac-Man? Because only the latter really has a chance. Perhaps some heretofore unknown state-owned Chinese mining firm will step in and buy both.