>METALS & MINING MONITOR (CITI)

■ Steel – The Worldsteel Association estimated November global steel production at 107.4 mln tonnes (-2.1% MoM, +22.4% YoY) and 75.0% utilization. Sequentially, US production held at 6.0 mln tonnes (-0.5% MoM, +26.9% YoY) as the ongoing cyclical recovery offset seasonality while China production declined to 47.3 mln tonnes (-8.7% MoM, +37.4% YoY). Spot iron ore fines imports into China rose by 9% to $115/ton delivered, lifting spot prices 66% above contract after adjusting for freight. This compares to consensus expectations of roughly 25%. Amongst our coverage, CLF and X own iron ore mines. US mill utilization rates declined 2.9% points to 62.0% for the week ending 12/18.

China Spot Iron Ore Prices Move Higher, Midwest Weather to Impact Appalachia Coal Supply

■ Coal – Platts reported that weather related power failures hampered production at many facilities in Central Appalachia and rail deliveries were delayed by as much as 4 days in many regions. Color from rail operators suggest that delayed shipments will be deferred and not cancelled under force majeure. Weekly coal shipments rose 0.4 mln tons from the prior week to 20.5 mln tons (-5.8% YoY) and power generation rose 0.7% YoY to 80.2 GWH as heating degree days came in at 141,1 above last year. In an abbreviated week with thin volumes, OTC CAPP coal for 1Q10 delivery eased $0.65/ ton to $51.50 while PRB fell $0.50 to $8.90/ton. Spot natural gas settled down $0.32/MMBtu on the week to $5.55/MMBtu after three weeks of strong gains.

■ Specialty Metals – In a media interview, Osaka Titanium (largest sponge producer in Japan) said they would keep capacity utilization at 45% to cope with excess inventories and aero related demand that is unlikely to recover until 2011. LME nickel surged $0.72/lb this week to $8.45/lb, a positive for stainless steel prices. Titanium scrap turnings rose $0.05/lb to $1.15/lb, well above the March bottom of $0.35/lb.

■ Non Ferrous – LME aluminum remained at $1.00/lb while global inventories rose 1% to 4,938k tonnes. LME copper rose 4% to $3.21/lb and global exchange inventories rose 1.6% to 678k tonnes. In November, Global aluminum production declined 8.4% YoY to 1.9 mln tonnes, while daily production gained 6% MoM to 44k tonnes

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