Baltic Dry Index. 814 +12 Brent Crude 49.81
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
"The paper standard is self-destructive."
Hans F. Sennholz
It is day two of the deliberations by the Masters of the Fiat Currency
Universe in Washington D.C., where the talking chair and her maladroit gang,
must today decide the 21 century equivalent of how many angels can dance on the
head of a pin, and set the price of US money among the Great Vampire Squids on
Wall Street. Vast teams of the Fedster’s modern monetary theory, 21st
century economists have toiled away in the Fed’s salt mines, pondering
imponderable things like the weight of the angels, the size of the pinhead, and
what kind of dance are these angels to do.
Flush with this forbidden fruit of knowledge, the MFCs get to pick one
of three options. Do nothing. Raise interest rates. Lower interest rates. Since
in their Norman Wisdom they are already at the zero bound, these Great Masters
of the FC Universe really only have a choice of the first two. Later today,
after forty winks, the Fed’s talking chair comes down from Mount Sinai and
delivers the word direct from Mammon which of the two it is to be.
While we wait on news from the DC coin toss, today we take a look at the
deflationary world of malinvestment in global steel and gold, that our central
banksters have caused by their ever more desperate attempts to keep the Great
Nixonian Error of fiat currency alive. I think most readers are clever enough
to know what happens later in our central bankster error prone, final act.
China says steel export limits won't solve trade tensions
Using anti-dumping measures to restrict Chinese steel exports will not
provide a lasting solution to growing trade tensions in the sector, which is
suffering from overcapacity on a global scale, China's commerce ministry said
on Wednesday.
With domestic demand
weakening,
the Chinese steel sector has seen the foreign market as a lifeline, with
historically low prices allowing them to boost exports by as much as 26.5
percent in the first eight months of this year.
weakening,
the Chinese steel sector has seen the foreign market as a lifeline, with
historically low prices allowing them to boost exports by as much as 26.5
percent in the first eight months of this year.
Chronic overcapacity has helped drive Chinese steel prices to their
lowest level in decades, and European steel body Eurofer has accused Chinese
producers of selling at prices that do not fully cover their costs.
But Shen Danyang, spokesman for the Ministry of Commerce, told
reporters that there were no grounds to believe that Chinese steel was being
dumped on overseas markets.
, told
reporters that there were no grounds to believe that Chinese steel was being
dumped on overseas markets.
"Blindly determining any case involving China as dumping is
unfounded and unjustified," he said, noting that the costs of Chinese
steel reflected the collapse in global iron ore prices.
"Overcapacity is the common problem faced by the global steel
industry during its restructuring process, but simply imposing limits just
isn't the channel or method that will fundamentally solve the problems,"
he added.
The China Iron and Steel Association (CISA) has warned that the
industry's growing reliance on exports might not be sustainable because of
growing trade friction, and urged its members to refrain from selling overseas
at below cost.
More
Glut of Chinese Steel Looms Large
China is increasingly using recycled steel, pressuring iron-ore prices and global miners
By John W.
Miller and Rhiannon
Hoyle Aug. 25, 2015 6:17 p.m. ET
The world’s biggest producers of iron ore have a problem, and it lies in the
steel that has already gone into China’s cars, bridges and skyscrapers.Over the past decade, China has accumulated more steel than any other economy in the world. And because steel can be endlessly recycled, the country’s steelmakers are likely to turn increasingly to scrap instead of the iron ore mined by the likes of BHP Billiton Ltd. , Rio Tinto PLC and Anglo American PLC.
On Tuesday, BHP Billiton, the world’s biggest miner, lowered its long-run forecast for peak China steel demand to between 935 million and 985 million metric tons from one billion to 1.1 billion tons. China’s annual production is currently at about 800 million tons.
This historic glut of Chinese steel, and concerns over the country’s economic prospects, have hurt prices for iron ore, the biggest ingredient in steelmaking. The commodity has fallen to roughly $50 a ton from $190 a metric ton in 2011, squeezing the profits—and share prices—of the world’s biggest mining companies. The S&P mining index has declined to 18.33 from above 70 over that stretch.
China accumulated so much steel so rapidly that the total amount of steel in the economy and available for recycling now stands far beyond the level that would be typical for an economy its size, at around five tons per capita, according to analysis by Morningstar Inc.
---- China’s appetite for iron ore led global mining companies to invest billions in new mines during the last decade, which are now contributing to the oversupply as demand slows. From Rio Tinto and BHP Billiton’s massive open-pit facilities in the Australian desert to Anglo American’s 330-mile slurry pipeline in the Brazilian jungle, companies bet big on massive mines, railroads and ports.
Global capital spending by miners surged from around $35 billion in 2000
to over $200 billion in 2012, before slipping back to around $150 billion,
according to SNL Metals.
---- But as construction cools in China,
the country is starting to export more of the steel it makes: its exports
increased 27% during the first seven months of the year, to 62.1 million tons,
and are expected to top 100 million tons this year, up from 53 million tons in
2013, according to Global Trade Information Services.
At some point next year, Chinese steel exports will surpass the total
production of the world’s second-biggest steelmaker, Japan.
More
Rising Chinese Steel Exports Continue To Wreak Havoc On Global Steel Industry
Sep 3, 2015 @ 01:40 PM
A
rising tide of cheap steel exports from China continues to take its toll on the
global steel industry, with ArcelorMittal’s South African
unit announcing the closure of two steel mills, and a review of operations at
the South African unit’s largest plant. Competition from cheap Chinese
steel imports has compounded the woes of ArcelorMittal
’s
South African unit, which was already suffering from weak steel demand. As per
statements by the company, Chinese steel imports are priced around 25% below
local production costs for steel in South Africa. Competition from cheap
steel imports has affected price realizations for the local steel industry and
made operations unprofitable. ArcelorMittal has petitioned the South African
government to raise tariffs on Chinese steel imports. The negative impact of
cheap Chinese steel imports is a familiar story with the North American steel
industry having already sought the imposition of anti-dumping duty on steel
imports, including those from China.
The
Chinese steel industry is currently characterized by an oversupply situation,
primarily due to a slowing Chinese economy. Chinese steel production stood at 823
million tons in 2014. Steel
production in China comfortably outstripped demand in 2014, which stood at
711 million tons. Weak
domestic demand has provided a sharp boost to Chinese steel exports, which rose
27% year-over-year in the first seven months of 2015. To give an
indication of the scale of Chinese steel exports, these stood at
67.13 million tons in the first seven months of 2015, which is
comparable to the total steel output during the same period from Japan, the
world’s second largest steel producer.
More
Government rejects Redcar's plea for £100m emergency loan
SSI’s finances have dwindled to the point that the plant’s bosses are monitoring cash flow every few hours
The Government has turned down a request for a £100m emergency loan from Redcar steel plant, leaving it on the brink of insolvency.Sahaviriya Steel Industries, the Thai company behind the historic works, is understood to have approached the Government for a bridging loan last week and offered to make 500 job cuts in return for immediate financial support. The desperate request came just months after SSI failed to repay a series of loans, and was forced to borrow £30m from one of its own directors.
Sources have revealed that the company explained to the Government that its financial situation had become so precarious that without a cash lifeline it may be forced into administration. However, ministers rejected the request on the basis that it would be illegal under state aid rules and told SSI that it should be looking for additional financing from the capital markets instead.
News of the rejection comes ahead of a three-hour parliamentary debate on Thursday to discuss the unfolding crisis in the UK steel industry, which has been hit hard by falling prices and cheap imports from China. Manufacturers including SSI have also complained about high energy costs and business rates.
---- It is believed that SSI’s finances have dwindled to the point that the plant’s bosses are monitoring cash flow every few hours. As well as defaulting on a series of bank loans, it has been claimed that suppliers and creditors have not been paid, and staff only received a third of their wages last month. Employees were told payment of the remainder of their salaries was dependent on the arrival of a shipment of raw materials, which would enable the company to produce the steel to bring in more cash.
Despite the company injecting roughly £1bn of its own money into the
plant since taking over in 2012, Redcar has been consistently lossmaking, and
is thought to have racked up a further £1bn of debt. This year, the firm’s
prospects have deteriorated even further. The price paid for slab steel has
fallen from $500 (£318) a tonne to under $300.
More
South Africa’s Platinum and Gold Mines Are in “Downward Spiral”
Andy Jackson Wednesday, September 16, 2015
South Africa is a tough place to do business as a miner. Labor uprisings and
tense relations between unions and mining companies are threatening mines’
long-term survival.Mines may close or become mechanized in the years ahead, and production could drop substantially during this rough transition.
The “old way” of mining in South Africa will probably disappear, says Andy Jackson, an exploration geologist at Sprott Global Resource Investments Ltd.
He believes that many mines will shut down if they can’t replace workers with machines.
Around 8% of South Africa’s economy depends on mining.1 South Africa is the 6th largest gold-mining country in the world, producing around 165 tons in 2014.2 It is also the world’s largest platinum producer, accounting for 78% of the world’s platinum production in 2013.3
----The precious metals mining industry in South Africa is going from bad to worse. Political changes, low metals prices, and mines that are getting deeper and tougher to mine are slowly killing the gold sector.
The South African labor unions, in particular the dominant National
Union of Mineworkers (NUM), have always demanded outrageous wage increases
(30-120% in a 5-6% inflation environment) during annual negotiations.
Employers, acting through the Chamber of Mines, would counter with an increase
of around the inflation rate.
After a bunch of posturing from both sides, they would agree to increase
wages to be even with inflation, plus a few percentage points.
But this annual pantomime has been totally disrupted by the arrival
of the Association of Mineworkers and Construction Union (AMCU).
AMCU says that its established rival NUM has been getting too cozy with
the government and with mining companies. This smaller union is saying that the
average mineworker in South Africa has seen no significant improvement to his
lot in life since the end of apartheid. Of course, they’re largely correct on
that front.
And the AMCU is preaching a much more radical approach, which has been
rapidly luring workers away from the more established NUM. Julius Malema, the
leader of radical populist party the Economic Freedom Fighters, has thrown his
support behind AMCU.
Last year, we saw the conflict between AMCU and NUM come to a head in
the platinum sector.
The Rustenburg platinum mines suffered a 5-month strike over wages.
----Now AMCU is turning its attention to the gold sector. NUM can’t afford another face-losing confrontation, so it has upped its ante, demanding larger increases and negotiating more strenuously. Neither union has much regard for how low commodity prices reduce the overall profitability of these mines.
There was a great quote in an interview with a NUM official last month.
He said something along the lines of: “We know the mining companies can’t
afford a big increase, but I am mandated by my members to get a big increase.
So we must strike.”
The main mining companies have increased their offers and NUM has
accepted the improved terms. The Solidarity Union (mainly made up of
skilled and semi-skilled workers) has also accepted, but the Chamber of Mines
says it has to be accepted by all the unions before it can be implemented. AMCU
has rejected the offer and so is again controlling the game.
More
"The history of paper money is an account of abuse, mismanagement, and financial disaster."
Richard M. Ebeling
At the Comex silver depositories
Wednesday final figures were: Registered 47.80 Moz, Eligible 119.73 Moz, Total
167.54 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today, when central bank Pixie Dust fails.
"The
first requisite of a sound monetary system is that it put the least possible
power over the quantity or quality of money in the hands of the
politicians." Henry Hazlitt
Japan's credit rating cut as S&P deals blow to Abenomics' credibility
Leading credit ratings agency Standard & Poor's has raised doubts over the prospects of Japan's attempts to revive its economy
Japan's credit rating has been cut by a leading credit ratings agency,
coming as a blow to the credibility of its "Abenomics" stimulus
package.
Standard & Poor's (S&P) downgraded Japan's credit rating by one
notch from A+ to AA- as it warned that the country's performance would not be
"strong enough" to justify a higher grade.
The decision will reignite doubts about the efficacy of Prime Minister's
Shinzo Abe's three-pronged package of measures intended to lift the Japanese
economy out of deflation.
Dubbed Abenomics, Tokyo's policymakers have sought to fend off weak
inflation with a combination of monetary and fiscal stimulus, and supply-side
reforms.
But S&P suggested that the much-heralded economic revival had failed to
materialise. The agency said that the lacklustre economic performance had led to a fall in per-capita incomes of nearly a
quarter in dollar terms from 2011 to 2014.
This reflected the yen's depreciation against the dollar, as well as "weak average economic growth during the period and persistently weak price trends", S&P said in a report.
Critics of Abenomics were bolstered by GDP figures published last month, which showed that the world's third-biggest economy had contracted yet again.
While the country's embattled policymakers have attempted to defeat deflation for the past two decades, Japan's debt pile has grown.
S&P said: "Japan's very weak fiscal attributes are an important weakness in its credit metrics." Japan's government debt now stands at about 250pc of GDP, and is on track to rise to 400pc by 2040.
"Since fiscal 2008, the damage that the global financial crisis and the great East Japan earthquake have dealt to the Japanese economy has depressed government revenue," the ratings agency said.
Its downgrade reflects "our expectations that modest growth and stabilisation of price levels will slow an increase in government indebtedness over the next two years and eventually stabilise it", it said.
Japan's rating could be cut further if there was an indication "that the government debt burden could rise more significantly than we currently expect", S&P added.
More
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."
F. A. von Hayek
Solar & Related Update.
With events happening fast in the development of solar power and graphene, I’ve added this new section. Updates as they get reported. Is converting sunlight to usable cheap AC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?
Researchers model graphene/nanotube hybrids to test properties
September 15, 2015 by Mike Williams
Rice University researchers discovered that putting nanotube pillars between sheets of graphene could create hybrid structures with a unique balance of strength, toughness and ductility throughout all three dimensions.Carbon nanomaterials are common now as flat sheets, nanotubes and spheres, and they're being eyed for use as building blocks in hybrid structures with unique properties for electronics, heat transport and strength. The Rice team is laying a theoretical foundation for such structures by analyzing how the blocks' junctions influence the properties of the desired materials.
Rice materials scientist Rouzbeh Shahsavari and alumnus Navid Sakhavand calculated how various links, particularly between carbon nanotubes and graphene, would affect the final hybrid's properties in all directions. They found that introducing junctions would add extra flexibility while maintaining almost the same strength when compared with materials made of layered graphene.
Their results appear this week in the journal Carbon.
Carbon nanotubes are rolled-up arrays of perfect hexagons of atoms; graphene is a rolled-out sheet of the same. Both are super-strong and excel at transmitting electrons and heat. But when the two are joined, the way the atoms are arranged can influence all those properties.
"Some labs are actively trying to make these materials or measure properties like the strength of single nanotubes and graphene sheets," Shahsavari said. "But we want to see what happens and quantitatively predict the properties of hybrid versions of graphene and nanotubes. These hybrid structures impart new properties and functionality that are absent in their parent structures—graphene and nanotubes."
To that end, the lab assembled three-dimensional computer models of "pillared graphene nanostructures," akin to the boron-nitride structures modeled in a previous study to analyze heat transfer between layers.
"This time we were interested in a comprehensive understanding of the elastic and inelastic properties of 3-D carbon materials to test their mechanical strength and deformation mechanisms," Shahsavari said. "We compared our 3-D hybrid structures with the properties of 2-D stacked graphene sheets and 1-D carbon nanotubes."
Layered sheets of graphene keep their properties in-plane, but exhibit little stiffness or thermal conductance from sheet to sheet, he said. But pillared graphene models showed far better strength and stiffness and a 42 percent improvement in out-of-plane ductility, the ability to deform under stress without breaking. The latter allows pillared graphene to exhibit remarkable toughness along out-of-plane directions, a feature that is not possible in 2-D stacked graphene sheets or 1-D carbon nanotubes, Shahsavari said.
More
The monthly Coppock Indicators finished August
DJIA: +65 Down. NASDAQ:
+168 Down. SP500: +92 Down.
No comments:
Post a Comment