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0.19 (26.76%) 
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Evolving Gold
Evolving Gold Intersects 115 meters at 1.35 gpt Au Wednesday, January 20, 2010
TSX ,TSX-V And Nasdaq Today - Gainers and Volume Leaders
China angst undermines copper prices U.S. housing market data could reinforce trend
Copper (HG-FT) slid on Wednesday, knocked by worries about demand after the latest move to tighten monetary policy in top consumer China, but analysts say strong growth data later this week will reinforce bullish sentiment.
Benchmark copper on the London Metal Exchange was trading at $7,460 (U.S.) a tonne at 1030 GMT from $7,545 a tonne at the close on Tuesday. The metal used in power and construction earlier hit a session low of $7,452 a tonne.
Losses were triggered by news that Chinese authorities have instructed some major banks to curb their lending over the rest of this month. Last week China raised bank reserve requirements for the first time since June 2008.
“But tonight we will see strong economic data from China, this will give commodity prices fresh support,” said Daniel Briesemann, analyst at Commerzbank.
Thursday sees the release of fourth quarter gross domestic product and December industrial production data in China, which accounts for more than 30 per cent of global copper demand estimated at 19 million tonnes this year.
Before then, the market will get a taste of how the land lies in the United States, the world's second largest consumer of copper, with the release of December housing market data at 1330 GMT.
“A second leg lower is possible when the U.S. housing numbers comes out ... recent data hasn't been too hot,” a trader on the LME floor said.
He added the stronger dollar against the euro was also partly behind negative sentiment in base metals, which could extend losses if U.S. producer prices raise the spectre of higher interest rates in the United States.
China Dominates
Overall, mining firms and investors are bullish about prospects for industrial metal prices, some of which have more than doubled over the past year.
“Investors remain confident in the global economic recovery, still betting on higher metals prices as we go forward,” said VTB Capital in a note.
“(However) a rapid manufacturing recovery is much needed in the West in order to help use existing stockpiles and fuel demand growth that is now predominantly driven by China's success story.”
Stocks of copper in London Metal Exchange warehouses at 526,650 tonnes are more than double the levels seen in the middle of July and the highest in 10 months.
Aluminum (AL-FT) inventories at above 4.62 million tonnes are within touching distance of record highs.
But the aluminum market is focused on financing deals – where banks buy material now and sell it forward, generating a return that far surpasses money market interest rates.
Effectively these deals help release cash for producers, but they also tie up material and have been a feature in other industrial metal markets.
Aluminum used in transport and packaging was trading at $2,275 a tonne from $2,293 on Tuesday, battery material leadat $2,413 from $2,425 and stainless steel ingredient nickel at $18,940 from $19,200.
Zinc, used to galvanize steel, was trading at $2,876 a tonne from $2,503 and soldering material tin at $17,900 from Tuesday's last bid at $17,975.
Why the U.S. needs all the tar sands oil it can get
Wednesday, January 20, 2010 6:11 AM
Why the U.S. needs all the tar sands oil it can get
Jeff Rubin
Governor Arnold Schwarzenegger and his Midwestern colleagues had better think twice before banning carbon-dirty fuels such as the oil made from Canadian tar sands. If they don’t like the fuel Canada has to offer, their only other choice is to get off the road entirely.
Like it or not, synthetic oil from Alberta’s tar sands is going to figure ever larger at American fuel pumps in the future (provided that it isn’t siphoned off to China by a pipeline to the west coast first).
American oil demand may be diminishing as more and more drivers take the exit lane, but available supply is shrinking even faster. Domestic production, formerly 10 million barrels per day, is already down by half. The longer the U.S. economy has run on oil, the more dependent it has become on energy imports. Only finding those imports is becoming more challenging all the time.
Sources of oil from Mexico are already collapsing, and in a few years’ time that country will cease exporting it at all. The flow of oil at its once-huge Cantarell field, representing almost half the country’s oil production, will soon slow to a fifth of its former peak rate.
And I hope Governor Schwarzenegger isn’t counting on Venezuela, the western hemisphere’s other major oil producer, to fill that gap. The only additional production that country will have to offer is from its Orinoco tar sands, the same stuff he says is too dirty to take from Canada. Moreover, fueling carbon-conscious gringos in California as they cruise down their sprawling freeways probably doesn’t rank high on President Hugo Chávez’s to-do list.
As for the Middle East, it’s not political risk that California’s motorists have to fear. It’s more Ski Dubai and the 7-cents-a-gallon bunker fuel burned to generate electrical power, along with 40-cents-a-gallon pump prices, that they should worry about. OPEC member states already consume almost 10 million barrels a day of their own production, and with every rise in oil prices they can afford to consume even more, and in the process export less.
None of this is to suggest that synthetic oil made from Canadian tar sands couldn’t get a lot cleaner. Put a $50 to $60 per ton price on carbon emissions, and all of a sudden shareholders of companies like Suncor and ExxonMobil (or its Canadian guise, Imperial Oil) will demand that management find a way of emitting less—the same way putting a price on the millions of gallons of fresh water those companies pollute will suddenly make water conservationists of them as well.
But Mr. Schwarzenegger and his fellow governors should realize one thing before they ban dirty fuels. The reason the United States will be so dependent on Canadian tar sands is that there ain’t a whole lot else left.
After nearly 20 years as the chief economist of CIBC World Markets, Jeff Rubin left the bank earlier this year to seek a larger audience for the story he wanted to tell.
His predictions of steadily rising oil prices over the last decade, including $100 (U.S.) per barrel oil by 2007, had flown in the face of conventional economic wisdom. As he said, soaring oil prices demonstrated that the traditional laws of supply and demand were no longer working for one of the global economy's most basic and essential commodities.
The consequences would be severe. He argued that it wasn't sub-prime mortgages, but record oil prices that drove the world economy into its deepest post-war recession. And unless the economy starts to wean itself off an ever depleting supply of affordable oil, he believes there will be other recessions to follow as economic recoveries quickly push oil prices right back into triple digit range. But weaning our economy off oil means some fundamental changes in the way we live.
That's not the kind of message chief economists' at investment banks are supposed to deliver so he resigned from CIBC World Markets to write about it in his new book Why Your World Is About To Get A Whole Lot Smaller. See his website at jeffrubinssmallerworld.com.
Tuesday, January 19, 2010
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