Natural gas eases off 2-year lows on cold weather outlook

Natural gas futures were higher on Friday, easing off two-year lows as reports of an outbreak of cold January weather was expected to stoke demand for the heating fuel.

On the New York Mercantile Exchange, natural gas futures for delivery in January were up 4.83% at $3.029 per million British thermal units during U.S. morning trade.

Natural gas futures found support after the U.S. government’s Global Forecast System published earlier in the week showed "a stronger cold push" in the Midwest.

The report also showed lower temperature readings for the Plains, Texas and the Northeast for January 3 through January 7, while forecasts turned colder in the central and northern mid-Atlantic regions for the following five days.

However, forecasts from Commodity Weather Group on Friday indicated that the weather in January will be 6.7% warmer than a year earlier.

Natural gas prices dropped below $3 per million British thermal units last week to the lowest level since September 2012, as unusually mild winter weather limited demand while production soared.

On Wednesday, the U.S. Energy Information Administration said in its weekly report that natural gas storage fell by 26 billion cubic feet last week, compared to expectations for a decline of 38 billion after a drop of 49 billion in the previous week.

Total U.S. natural gas storage stood at 3,220 trillion cubic feet.

Approximately 49% of U.S. households use gas for heating, according to the EIA, the statistical arm of the Energy Department.

Nickel prices likely to move higher in 2015

The rapid change in fundamentals led to high volatility in Nickel prices in 2014. The volatility is expected to continue in 2015, according to analyst reports.

The expectations of an interest rate hike by the US Fed and the feared slowdown in Chinese economy are the major drivers for base metal prices this year. The Nickel prices plunged almost 22% from its peak to close 2014 at $14,935 a tonne. The prices had hit its yearly high of $21,200 a tonne after the imposition of ban on exports by Indonesia. The suspension of production at the Koniambo mines in New Caledonia further support Nickel prices in 2015.

According to latest forecast provided by the London-based consultancy Natixis Commodity Markets, the Nickel prices are likely to average nearly $19,000 a tonne in 2015. This is almost 13% higher than the 2014 average price of $16,867 a tonne. Natixis believes that prices may get adequate support due to supply concerns. However, easing of such concerns would lead to drop in nickel prices in 2016. It predicts the average price in 2016 at $17,375 a tonne.

Natixis forecasts the average price for copper at $6,335 a tonne, aluminum at $2,071 a tonne, zinc at $2,523 a tonne and lead at $2,145 a tonne for 2015.

US Debt Soars By $100 Billion On Last Day Of 2014, Hits Record $18.14 Trillion

It seems like it was only yesterday when we reported that, in yet another sleight of hand for the US Treasury and Social Security Administration, US debt rose by $32 billion on the last day of November sending total US debt above $18 trillion for the first time ever.  As we further noted, it also meant "that total US debt has increased by 70% under Obama, from $10.625 trillion on January 21, 2009 to $18.005 trillion most recently."

Fast forward to today when we are happy to report that according to the US Treasury, America's debt-funded spending spree, while supposedly slowing down if looking at the declining monthly budget deficit report, never actually has.

As of the last day of 2014, total US debt soared by $98 billion in one day (driven again by Social Security debt surging on the last day of the month to a record $5.117 trillion), and closing off 2014 with a new all time high total of $18.141 trillion in Federal debt - an increase of $136 billion in the month of December and $790 billion for all of 2014.

Source: US Treasury

And The Second Best Performing Currency Of 2014 Is... Gold

Arguing that gold is not a currency?

GREENSPAN: Yes... Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.

Source: The Market Oracle

Chinese November net Lead product exports hit 2014 high of 5,547 tons

China’s net exports of lead products, which include refined lead, lead alloy, lead plate, and other lead semis, hit 5,547 tons in November, the highest thus far in 2014, Customs reported.

China imported 1,402 tons of lead products in November, and exports climbed to 6,949 tons.

4,672 tons of refined lead and 1,872 tons of lead plate were shipped from China in November, with their combined number representing 94.2% of total lead product exports for the same month.

The SMM/LME lead price ratio left few profitable opportunities for lead exports, but many Chinese companies exported refined lead and lead plate in the form of processing trade, driving up the export volumes.

Taiwan and Vietnam were still major buyers of refined lead from mainland China, while lead plates were primarily exported to ASEAN members.

Happy New Year 2015

Mining in 2015: Copper price topped

What happened in 2014:

The price of the red metal briefly dipped below $3 a pound in March – a near four-year low – on market expectations of a move into surplus after years of deficits.

By the third quarter it was clear mining output and shipments were falling far short of predictions thanks to suspended Indonesia concentrate exports and (surprise, surprise) project delays and production disruptions.

While oversupply fears proved to be overblown, copper is ending the year down 15% near its lowest for the year as uncertainty over Chinese consumption continues to gnaw at investors.

How things could change in 2015:

While not all of it will reach markets, forecast mine output growth through the year of 6% or 1mt and another 800kt in 2016 is still a lot to absorb.

Falling oil, the top input costs for all miners bar those lucky enough to sit on copper oxide, could also have the perverse effect of keeping high-cost mines in the game for longer, further depressing prices.

Too much is being asked of Chile and Peru which together must bring 7.5mt to the table

China’s refined output is racing ahead hitting a record 7.2mt from January-November, up 11.5% year-on-year and more capacity will come on stream 2015.

There’s nothing like a crises to focus minds so Mongolian politicians could even resurrect Oyu Tolgoi’s much anticipated and mammoth phase II while other long shots like Iran – expected to produce 300kt in 2015 no less – returning to the market could weigh on the price beyond 2015.

There is price upside potential: Too much is being asked of Chile and Peru which together must bring 7.5mt to the table in 2015. Codelco’s problems with arsenic, grades, labour and funding are well documented.  And Peru’s new flagship projects like Las Bambas and Constancia still needs work.

Price end-2015:

Not much below $3/lb (and that counts as bullish) and a rising trend into 2016.

All bets are off if…

China State Grid Corp’s $65 billion annual fixed investment budget plus rollover from funds unspent during 2014 finally gets deployed.