Market Nuggets: Silver Inflows To ETFs Rise Sharply


Market Nuggets: Silver Inflows To ETFs Rise Sharply – Barclays11 November 2010, 8:23 a.m.
By Debbie Carlson
Of Kitco News
http://www.kitco.com/
(Kitco News) — Inflows to silver exchange traded funds rose sharply on Wednesday, registering an increase of 354 metric tons, Barclays Capital says in a research note. That figure almost matches the total inflows during all of October. The bank says Wednesday’s flows are the largest daily influx since December 2007. Nearly all of the purchases went to the largest ETF, iShares. The heavy inflows are a turnaround from April, when the largest ever monthly outflow was 335 tons. The bank notes the rise in ETF inflows is in contrast to the drop in long speculative interest in Comex silver futures. “A build in ETP interest is normally more positive as it reflects longer-term demand for the metal; however, silver’s own fundamentals still look burdensome and heavily reliant on investment demand to drive prices higher,” they say.

By Debbie Carlson of Kitco News; dcarlson@kitco.com

11 November 2010, 8:23 a.m.
By Debbie Carlson
Market Nuggets: Base Metal Restocking Likely To Start In 2011 – Barclays

(Kitco News) — Demand for base metals has surged past market expectations, which has lifted prices, and market participants are likely working through inventory, rather than have restocked supplies, Barclays Capital says in a research note. Because of that demand for base metals might pick up in early 2011 as market users need to rebuild supplies once the seasonally slow period of the fourth quarter ends. The bank believes Chinese consumers will be ending 2010 with unsustainably low inventories as they work through current supplies and deal with power-related production curbs to refined metal output. Other regions will need to rebuild supplies, too, they say. “We therefore see the potential for a sizeable restocking boost to base metals buying in early 2011, in China, North America and parts of Europe, even if prices are still high. This stronger buying is likely to be the next catalyst for base metals prices, in our view, with those metals where supply is tight, such as copper and tin, posing the biggest upside potential,” Barclays says.

By Debbie Carlson of Kitco News; dcarlson@kitco.com

11 November 2010, 7:56 a.m.
By Allen Sykora
Market Nuggets: LME Copper Hits Record High After Chinese Economic Data–R.J. O’Brien

(Kitco News) — China’s strong economic reports have sent three-months copper on the London Metal Exchange to an all-time high, says Janet Mirasola, managing director of metals at R.J. O’Brien & Associates. Chinese data include a 4.4% rise in the Consumer Price Index, industrial-production growth of 13.1% and growth in retail sales of 18.6%. Furthermore, Moody’s Investors Service raised China’s debt rating. China is the world’s largest consuming nation of copper. As of when Mirasola wrote her daily research report, copper had peaked at $8,966 a metric ton, surpassing the previous high of $8,940 from July 2008.

By Allen Sykora of Kitco News; asykora@kitco.com

11 November 2010, 7:49 a.m.
By Allen Sykora
Market Nuggets: Commerzbank: Price Of Rare-Earth Metals To Rise From Elevated Levels

(Kitco News) — The price of rare-earth metals is likely to keep rising, says Commerzbank. The metals, which compromise 17 elements of the periodic system, are critical to a number of industries, including consumer electronics and technology, auto, alternative energy, plus they are used in military hardware. Prices have already skyrocketed in 2010, with cerium jumping from $3.88 per kilogram in 2009 to $50 at the start of November, Commerzbank reports. China, which has a virtual monopoly on production of these metals, has cut export quotas. There is little alternative supply in the short to medium term, as additional supply from the U.S. and Australia won’t hit the market until 2012-13 at the earliest. “As it will likely take years to raise the supplies necessary to meet global demand, we argue that rate-earth prices will rise strongly over the short to medium term from their already-elevated levels,” Commerzbank concludes. “In fact, there is also the risk that a shortage may be ahead.”

By Allen Sykora of Kitco News; asykora@kitco.com

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