Global Copper Production Under Stress

Global Copper Production Under Stress
Richard (Rick) Mills
Ahead of the Herd

As a general rule, the most successful man in life is the man who has the best information

Capital inputs account for about half the total costs in mining production - the average for the economy as a whole is 21 per cent. Obviously many of the costs, once incurred, cannot be recovered by sale or transfer of the fixed assets.

Update On Copper Mining In Chile

**Update On Copper Mining In Chile**
Sunday, 11 November, 2012
By: Charles Kubach, Mine-Engineer.Com

Copper mining costs are being reported ranging from around $2/pound to a high of $3.20 per pound. As China's economy cools to a 5% growth rate, they require fewer resources, such as steel and copper, so the demand weakens, but if American and European economies ever recover, copper will again rise to the $4 per pound level. The trick is to still be in business when that happens, and keeping mines profitable and costs in line is how a mining company will do that. By utilizing process efficiencies, convincing the government to not tax and fee the industry into oblivion, and keeping mine costs in line with projected income will determine if Chile's copper thrives or moves on to another continent.

Russia: the CBR left rates unchanged in Nov as expected

Russia: the CBR left rates unchanged in Nov as expected

In Russia, the CBR made decision to leave all key rates (depo, repo and refi) unchanged in November. This decision has been highly expected as CPI inflation slowed to 6.5%y/y in October, providing the CBR time for manoeuvre. However, we generally see October's relief in food price pressure as temporary and expect a new round of food inflation soon, resulting in a new acceleration of CPI inflation. This makes monetary tightening likely. We expect the CBR to hike rates by 25bp in Dec and see refi rate at 8.5% by 2012-end (flat in 2013). The decision is planned to in the first ten days of Dec (presumably, 7 Dec 2012).

Mexico: Banxico’s Minutes – Limits to Patience

Mexico: Banxico’s Minutes – Limits to Patience

Nader Nazmi - Market Economics
Latam Macro Snapshot | 09 Nov 2012 16:45 |

Worried about inflation for now.

According to the minutes from the 26 October meeting of the Monetary Policy Committee (MPC), the board sees elevated risks to inflation near term. While it judges supply shocks as the main cause of high inflation, it is mindful of second-round effects. It is worried that price pressures, albeit temporary, will contaminate inflation expectations, result in wage hikes that exceed the inflation target and spill over to core inflation. This is especially a concern given that the output gap has closed (and is likely positive) and inflation has been stuck above the 4.0% Banxico implicit tolerance ceiling for five months.

Brazil: The Hunt for Red October

Brazil: The Week Ahead - The Hunt for Red October

Marcelo Carvalho - Market Economics
Brazil: The Week Ahead | 09 Nov 2012 16:30 |

You may have seen the film. The 1990 movie “The Hunt for Red October” is a thriller adapted from the Tom Clancy novel of the same name. In the story, Red October is the name of the new Soviet submarine that sonars are unable to detect. Sean Connery plays the commanding officer of the boat. Currently in Brazil, bearish forecasters seem to be hunting for a red October on growth data.

China: Chinese export growth improved further (W. Yao)

Eco Analysis - Chinese export growth improved further (W. Yao)

China's export growth surprised on the upside again, but imports remained sluggish.
China's export growth rose further to +11.6%yoy in October from +9.9%yoy in September, beating expectations (Cons. +10%; SG +9%) for a second month. There were two more workdays last month than that in October 2011, which contributed to the headline improvement. But, even if excluding this factor, exports still hold up reasonably well. Export growth to the US and the European Union improved to +9%yoy and -8.1%yoy in October from +5.5yoy and -10.7%yoy in the previous month, previously. As in September, emerging Asia outperformed the most, with exports to ASEAN economies rising 44%yoy. However, we remain cautious on the export outlook, amid weak order figures, especially those from the Canton fair (-9%yoy).

Frankfurt Turns Offices to Homes as Excesses Lift Vacancy

Bloomberg News
Frankfurt Turns Offices to Homes as Excesses Lift Vacancy
By Dalia Fahmy on November 09, 2012

Vijay Vankadari, who has renovated Frankfurt apartment buildings for more than a decade, used a cheap and plentiful resource for his latest residential project in the city: old office buildings that businesses won’t touch.

http://www.businessweek.com/news/2012-11-08/frankfurt-turns-offices-to-homes-as-excesses-lift-vacancy

China: CPI and PPI (Oct 2012)

China: CPI and PPI (Oct 2012)

Xingdong Chen - Market Economics
Asian Instant Insight | 09 Nov 2012 03:43 |

CPI eased to a 33-month low of 1.7% y/y and PPI deflation improved to -2.8% y/y. We believe both CPI and PPI have bottomed. But through the year end, CPI would stay mild and PPI continue to be negative. However, policymakers have concerns over inflation next year on the back of economic recovery and monetary easing in developed nations. The need and odd of another cut in interest rate is diminishing along with economic rebound in Q4. Nevertheless, we still expect authorities to maintain the accommodative policy stance to protect the green shoots by ensuring adequate market liquidity and enhancing transmission of monetary policy.

Turkey: Industrial production increased sharply in September

Turkey: Industrial production increased sharply in September

At 6.2% y/y, September's industrial production index beat the market consensus (2%) and our more optimistic forecast (3.4%). On a seasonally adjusted basis, industrial production increased by 3.9% m/m, following a 2% m/m decline in August, which waspartly due to the Ramadan effect. As a result, in Q3, industrial production increased by 0.9% q/q. Should IP remain flat till the year end, this would translate into a 1.9% q/q increase in Q4.

Chile: CPI inflation surprised to the upside in October lifted by food prices

Chile: CPI inflation surprised to the upside in October lifted by food prices

Florencia Vazquez - Market Economics
Latam Macro Snapshot | 08 Nov 2012 21:14 |

Consumer prices were reported to have advanced 0.6% m/m in October, a result that stood visibly ahead of both our forecast and the median estimate from the Bloomberg survey (both: 0.3% m/m). The annual inflation rate accelerated to 2.9% last month, but remained slightly below the 3% official target.