Railway Budget 2014-15: Highlights

Union Railway Minister D.V. Sadananda Gowda presented his maiden Railway Budget in Parliament on Tuesday. Here are the highlights of this Budget.

* No new increase in passenger fares and freight charges

* Bullet train in Mumbai-Ahmedabad sector

* Diamond quadrilateral for high speed trains

* Plan to hike speed of trains to 160-200 km/hr in 9 sectors

* Online booking to support 7,200 tickets per minute; to allow 1.2 lakh users log in simultaneously

* Reservation system to be revamped, ticket-booking through mobile phones, post offices to be popularised

* Online platform for unreserved tickets

* Combo parking-platform tickets at stations

* Women RPF Constables to escort ladies coaches; 4,000 women constables to be inducted

* Retiring room facility to be extended to all stations

* Battery operated cars for differently-abled and senior citizens at major stations

* Feedback services through IVRS on quality of food

* Food can be ordered through SMS, phone; Food courts at major stations

* Cleanliness budget up by 40 per cent over last year

* CCTVs to be used at stations for monitoring cleanliness

* Setting up of corpus fund for stations’ upkeep; RO drinking water in some stations and trains

* Automatic door closing in mainline and sub-urban coaches

* 58 new trains and extension of 11; 864 additional EMUs to be introduced in Mumbai over 2 years

* FDI in railway projects, except in operations

* FDI, domestic investments in rail infrastructure

* Office-on-Wheels: Internet & workstation facilities on select trains

* WiFi in A1, A category stations and in select trains

* Railways university for technical and non-technical subjects

* Some stations to be developed to international standards through PPP model

* Parcel traffic to be segregated to separate terminals to make passenger traffic unhindered

* Loss per passenger per kilometre up from 10 per cent in 2000-01 to 23 per cent in 2012-13

* Solar energy to be tapped at major stations

* Highest ever plan outlay of Rs. 65,455 crore for 2014-15

* Expenditure in 2014-15 pegged at Rs. 149,176 crore.

Peru's Gold, Copper, Zinc output decline during May; Silver up 7.5% y/y

Peru gold, copper zinc and tin production declined sharply year-on-year during May this year while its Silver output advanced by nearly 7.5% from a year earlier, as per latest government data.

Gold and Silver Production
Gold production declined sharply by 24.6% to 10,629 kg from 14,091 kg a year ago on falling production at mines operated by Newmont (-40%) and Barrick (-31%). Production has also fallen due to a government crackdown on illegal gold miners in the Amazon jungle.

Silver production advanced sharply by 7.4% year-on-year to 332,629 kg as Buenaventura (+24%) increased production.

Minerals account for about 60% of Peru's total exports. Peru is also the world's second-biggest silver producer and fifth biggest producer of gold.

Copper, Zinc ad Tin Production
Nation's copper production dipped by 2.1% to 106,946 mt from 109,278 mt a year earlier as declines at Antamina (-27%) and Freeport's Cerro Verde mine (-11.2%) offset gains at Glencore's Antapaccay operation (+17%) and Southern Copper (+12.4%).

Zinc production fell 6.6% to 112,528 mt due to a drop in output at Antamina and mine closures by Buenaventura and San Ignacio de Morococha, while lead gained 3.1% to 23,575 mt on gains at Votorantim Metais unit Milpo and the startup of Trevali Mining's Santander mine, according to the ministry.

Minsur, the country's only tin producer, increased production 4% to 1,892 mt, while molybdenum rose 0.8% to 1,208 mt as Southern Copper increased output. Cadmium production at Votorantim Metais' Cajamarquilla refinery gained 16.3% to 67 mt and tungsten rose 64% to 7 mt.

Morgan Stanley Raises Nickel Forecast by 13% in 2014

Morgan Stanley raised its nickel price forecast by 13 percent for this year and 6 percent for 2015, anticipating a supply squeeze caused by Indonesia’s ban on ore exports.

The metal will average at $17,640 a metric ton this year and $19,346 next year, analysts including Joel Crane wrote in a report today.

Nickel has jumped 39 percent in 2014, the most among six main metals traded on the London Metal Exchange, after Indonesia barred ore exports of unprocessed ores in January. China is the biggest consumer of the metal, with Indonesia its most important supplier of ore to make nickel pig iron, a cheaper alternative to refined metal for making stainless steel.

“Prices caught a second wind in the second quarter after production at two key projects in New Caledonia, Glencore Xstrata Plc’s Koniambo and Vale SA’s VNC, failed to meet expectations, likely accelerating the impending supply-demand imbalance,” the analysts wrote.

Global supply will exceed demand by 44,200 tons in 2014 before shifting to a deficit of 97,100 tons in 2015, the first annual shortfall since 2010, the bank said. Nickel for delivery in three months on the LME fell 0.4 percent to $19,250 a ton at 10:38 a.m. in Tokyo.

Nickel ore and concentrate imports into China have slumped 36 percent this year, the bank said. China’s nickel pig iron output will drop to 388,000 tons in 2014 and to 212,000 tons in 2015 from 472,000 tons in 2013, it said. Indonesia’s pig iron production will rise from 1,000 tons this year to 46,000 tons in 2015 and about 150,000 tons in 2017, the analysts wrote.

U.S., Europe

Stainless steel orders in the U.S. remain strong, with some mills booking as far out as November to December, the bank said, citing Wood Mackenzie Ltd. In Europe, consumption of stainless products is strong because of a substantial pick-up in demand from the construction and auto industries, it said.

Base metals will probably be the greatest beneficiaries of China’s intensifying policy-easing measures this quarter, Morgan Stanley said. The bank maintained its positive outlook on copper amid a global shortage and expects prices to average $7,055 a ton in the second half of this year and $7,397 in 2015. It traded at $7,119.50 this morning in Tokyo.

“Copper, lead, and zinc supply-demand balances are already in deficit,” the bank said, adding that nickel and aluminum are headed in that direction.

Morgan Stanley also raised its average price estimates for aluminum by 7 percent to $1,830 a ton in 2014 and 6 percent to $1,913 in 2015, while the bank increased its estimates for zinc by 3 percent to $2,123 in 2014 and 1 percent to $2,348 in 2015.

Chinese aluminum surplus likely to contract in 2014, say analysts

The expected Chinese aluminum surplus in 2014 is likely to get reduced, according to most recent analysis. The robust demand from transport sector and the closure of more facilities may reduce the aluminum surplus from earlier projected 1 million tonnes to less than 500,000 tonnes.

According to sources, almost 2 million tonnes of high-cost smelter facilities were idled in the country between end-2013 and May this year. This followed the sharp fall in aluminum prices. The prices had touched a 5-year low during March this year. However, almost 500,000 tonnes of idled smelters returned to operation following the recovery in prices. The aluminum prices have already recovered nearly 15% from the March lows.

The country’s primary aluminum output grew 7.9% during the first five months of the year when compared with the output during the corresponding five-month period in 2013. The Chinese primary aluminum output totaled 9.59 million tonnes during Jan-May this year. The growth rate has slowed down when compared with 8.2% rise recorded in 2013 over the previous year. The analysts have lowered the projected annual output to less than 28 million tonnes from 28.3 million projected earlier.

The robust demand from transport sector is likely to eat away any surplus production. The export of semi-finished products which makes use of primary aluminum has risen sharply during the second quarter of 2014.

Dow Loses 17,000; Catches Down To Bonds

We warned Thursday that there was something wrong with the picture of the equity market's exuberance but it seems the July-4th-week-effect has run its course and equity markets - having read the jobs report over the weekend - have realized it is anything but strong. The Dow just lost 17,000 (however briefly) and equities are catching down to Treasury yield's drop as USDJPY loses 102.00.

Dow loses 17k...

as Stocks catch down to bonds...

Charts: Bloomberg

Weekly Economic Data for the week 05-Jul-14 to 11-Jul-14

Avg. change of last 1 year:	Average Change in Actual data calculated for last 1 year.
Expected impact on price:	This indicator shows the effect of the anticipation of data on the prices of related country’s major indices. We have categorized it as below: Very Good Good Neutral Bad Very Bad
Actual:	Refers to the actual/latest figures after its release.

Data for the week 05-Jul-14 to 11-Jul-14

Date	Time (IST)	Country	Data	Exp.	Prior	Exp. chg today	Avg. chg of last 1 year	Exp. Impact on Price
07-Jul-2014	06-00 AM	Japan	BOJ Governor Kuroda Speaks at Branch Manager Meeting					Neutral
07-Jul-2014	11-30 AM	Germany	Industrial Production s.a. (MoM)	0%	0.20%	-0.20%	2.36	Neutral
08-Jul-2014	09-15 AM	Japan	BOJ Deputy Governor Nakaso Speaks in Tokyo					Neutral
08-Jul-2014	12-30 PM	European Monetary Union	EU Finance Ministers Hold Meeting					Neutral
08-Jul-2014	02-00 PM	United Kingdom	Industrial Production (MoM)	0.3%	0.4%	-0.10%	1.75	Neutral
09-Jul-2014	07-00 AM	China	Consumer Price Index (YoY)	2.4%	2.5%	-0.10%	0.43	Neutral
09-Jul-2014	07-00 AM	China	Producer Price Index (YoY)	-1.0%	-1.4%	0.40%	0.61	Neutral
09-Jul-2014	08-00 PM	United States	EIA Crude Oil Stocks change	--	-3.15	3.15	3.45	Neutral
09-Jul-2014	11-30 PM	United States	Fed Releases Minutes from June 17-18 FOMC Meeting					Neutral
09-Jul-2014	11-30 PM	European Monetary Union	ECB President Mario Draghi speaks in London					Neutral
10-Jul-2014l	--	China	Imports (YoY)	5.6%	-1.6%	7.20%	6.92	Neutral
10-15 Jul-2014	--	China	Money Supply M2 YoY	13.5%	13.4%	0.10	0.71	Neutral
10-15 Jul-2014	--	India	Exports YoY		12.4%		4.06	Neutral
10-Jul-2014	--	China	Exports (YoY)	10.2%	7.0%	3.20%	5.65	Neutral
10-Jul-2014	--	China	Trade Balance	36.95B	35.92B	1.03	13.34	Neutral
10-Jul-2014	01-30 PM	European Monetary Union	ECB Publishes Monthly Report					Neutral
10-Jul-2014	04-30 PM	United Kingdom	Bank of England Bank Rate	0.5%	0.5%	0.00	0.00	Neutral
10-Jul-2014	08-00 PM	United States	EIA Natural Gas Storage change	--	100	-100.00	33.60	Neutral
11-Jul-2014	02-00 AM	United States	Fed's Fischer Speaks on Finance Sector Reform in Cambridge, MA					Neutral
11-Jul-2014	03-30 PM	European Monetary Union	ECB Announces 3-Year LTRO Repayment					Neutral
11-Jul-2014	05-30 PM	India	Industrial Production YoY	--	3.4%		2.08	Neutral

Global Nickel market to see deficit in 2015-'17: Eramet

The French mining and metallurgy major Eramet predicts the global nickel market to remain in deficit during 2015-2017 if Indonesia persists with the ban on exports of unprocessed nickel. The company CEO Bertrand Madelin expressed the view while speaking at a company news conference in Tokyo.

According to the company, stocks of nickel ore at Chinese ports are likely to reach lower levels by the end of this year. The world nickel market will end up in slight deficit by end-2014. The Chinese stock levels are likely to deplete owing to the ongoing Indonesian export ban. The global nickel market had reported nearly 150,000 mt of surplus in 2013.

The company foresees the global nickel market to end in real deficit by 2015 on continuing Indonesian ban. A similar ban from Philippines is likely to add to deficit-woes, added Madelin.

Eramet is a French multinational mining and metallurgy company, listed on the Euronext Paris exchange. The company produces non-ferrous metals and derivatives, nickel alloys and superalloys, and high-performance special steels. Through its subsidiary Société Le Nickel, the company has its historical roots in nickel mining, and for over 100 years has maintained a large mining operation in the French overseas territory of New Caledonia. It is also a major producer of manganese from mines in Gabon.