Dow Jones/Non Ferrous Metals Outlook.
by Gianclaudio Torlizzi

As forecast, aluminum and copper prices at the London Metal Exchange (LME) have increased since the beginning of the month and we believe that further gains are ahead. The copper 3-months contract climbed above 8,000 USD/t in week 15. This price level was last seen before the Lehman crisis in the summer of 2008. Similarly, the aluminum 3-months contract has ticked up by 4% since early April.

Steel Market Analysis
by Gianclaudio Torlizzi

The steel market continues to be torn between two countervailing forces accelerating raw material costs versus sluggish demand in industrial countries. Exploding raw material costs have provided the basis for double-digit percentage increases of steel prices since the beginning of the year. So far, buyers have viewed higher list prices as temporary and held off placing orders, trusting that buying interest is too subdued to support higher steel prices over an extended period of time.

Flash News
by Gianclaudio Torlizzi

Radiometric controls extended to metal semifinished, risk of congestion in Italian ports.

Radiometric control over imports from extra-EU countries through Italian ports will become mandatory for all metal semifinished products as of April 7th. Such control is currently applied only to ferrous and non ferrous scrap, as established by a legislative decree (n. 230/1995), but it will be then extend to the other materials. Though not yet widely spread, the news is likely to cause a pandemonium within the metal market.

STEEL MARKET OUTLOOK
by Gianclaudio Torlizzi

As predicted, European steel prices climbed higher over the last fortnight, and we believe that there is still more room to the upside. In our view, the second quarter should start on a strong foot: We expect that prices in both the long and flat steel segments will tick about 7 to 10% above current levels by the middle of Q2/10. According to our model, European wire rod prices may average about 7% above current levels, while hot-rolled coils may gain even more. The driving forces behind this continuous trend are sustained gains in raw material prices.

NON FERROUS ANALYSIS 4 MARCH 2010.
by Gianclaudio Torlizzi

Our forecast calls for further gains in the base metals markets over the next 4 weeks. Aluminum prices at the London Metals Exchange (LME) may make up for some of their recent losses and trend up by as much as 5% by the end of March. The market was nearly flat last month, but suffered steep losses in January. Copper, on the other hand, may rise less than our base price trend line suggests, as the red metal already gained considerably in recent trading sessions on the back of supply uncertainties after the Chilean earthquake. Copper gained roughly 6% in London trading last month and started strong into the month of March due to panic buying.

STEEL ANALYSIS 25 FEBRUARY 2010
Steel prices to rise further, driven by raw material costs.
by Gianclaudio Torlizzi

Further price increases are in the pipeline as steelmakers will continue to pass on higher input costs to consumers. Amid depleting stocks and improving demand in some industries and regions, buyers throughout Europe are already being forced to paying more for deliveries in March and beyond. Our model calls for further price increases in the flat steel segment over the next couple of months. The long segment meanwhile is set to rise even more.

NON FERROUS MARKET OUTLOOK
by Gianclaudio Torlizzi
gianclaudio.torlizzi@dowjones.com
+39.02.58.21.9919

Since early January, commodity prices have fallen because of a stronger dollar and measures taken by China to restrain excessive bank lending. But the upward trend is unbroken as we predicted. The base metals markets now show again signs of recovery after a week of selloff. Our model calls for moderate gains over the next two months. The historical dollar weakness and once again improved investor sentiment because of positive economic data should underlye the base metals for the next weeks. For the short term only the Chinese New Year adds a bearish tone to the markets. So rallies could probably be sold as investors lock in profits until the Chinese participants return to the markets after the New Years week.

Market's thoughts
by Gianclaudio Torlizzi

I. Strategy
II. Credits
III. Liquidity, currencies & gold
IV. Commodities

I. Strategy
I received the following email yesterday morning: “So this is how it works…The US House passes a Health Care Bill. The dollar goes down. The market goes up and commodities follow…See how easy it is.” Here was my immediate response: “WARNING: Do not use your mind when investing….it can get in the way of making money.”

New column on wiredrawing.net: "Raw materials observatory".

wiredrawing.net's staff is glad to announce the beginning of a new column on raw materials, edited by Dow Jones Financial Information Services.

Aluminum supported, copper showing strength.

Two themes will be dominating the base metals market in the coming weeks: the US-dollar and China’s commodity trade balance. But we believe that the weakness in the greenback will overshadow concerns over fading Chinese imports and/or rising exports, adding to the positive momentum in the metals markets. Aluminum LME cash prices will, in our view, comfortably surpass the 2,000 USD/t barrier before the end of November, while copper is on track to transcend 7,000 USD/t.

October saw some impressive developments in aluminum prices, but weaker stock markets and concerns over the pace of economic recovery weighed on prices towards the end of last week.