China to cut RRR by 50 basis points

 China's central bank on Wednesday decided to lower the reserve requirement ratio (RRR), the minimum level of reserve banks must hold, by 50 basis points from Feb. 5.

The People's Bank of China (PBOC) also increased support to some target areas, cutting the RRR by an extra 50 basis points for certain commercial banks engaged in proportionate lending to small firms, the farming sector and major water projects, said the central bank's statement.

The Agricultural Development Bank of China, the sole policy lender for agriculture, gets an RRR reduction of 4 percentage points.

Currently, big banks must hold 20 percent of their deposits in reserve, while the ratio for small and medium-sized banks is 16.5 percent.

The move came days after the purchasing managers' index, a main gauge of manufacturing activity, fell below the 50-point mark for the first time since October 2012, a sign of a weakening economy. The world's second largest economy grew at the slowest rate for 24 years in 2014.

The PBOC said that it would "continue a prudent monetary policy, striking a balance between being tight and loose, guiding monetary credit and private financing to grow steadily and moderately, promoting a healthy and steady economy."

The central bank cut benchmark interest rates for the first time in more than two years in November 2014. 

Rusal's aluminum production hits record low in 2014

The Russian aluminum major-Rusal's aluminum output during the entire year 2014 dropped significantly by over 7% in 2014 to touch the lowest levels since the company's merger with Sual in 2007. Rusal's aluminum production during 2014 totaled 3.6 million mt.

However, the Rusal management stated that it has met its production guidance for the year 2014. The company had put strict controls on aluminum production and had shifted focus to value added products in 2014. Value added products including billets, slabs, wire rod, foundry alloys and high purity aluminum accounted for nearly 45% of the total production. Rusal had idled seven smelters during the year in an attempt to improve the global demand-supply situation.

The company further stated that the cautioned approach will continue in 2015 as well. Rusal's production guidance for the year 2015 stood at 3.6 million mt, unchanged from 2014. This constitutes 80% of the company's total production capacity of 4.5 million tons per year. Also, it also has no plans whatsoever to resume production any time soon at the idled facilities.

According to Rusal, the average aluminum sale price has increased by 3% from $2,150 per mt in 2013 to $2,219 per mt in 2014. The country's alumina production has dropped marginally by 1% to 7.2 million mt in 2014. On the other hand, bauxite production during the year was up 2% year-on-year to 12.1 million mt in 2014.

Rusal forecasts 6.5% growth in global aluminum demand during 2015. The markets excluding China are most likely to encounter sharp deficit in supply during the year, it stated.

Nickel to see first deficit in 5 years: Sumitomo

The Japanese Nickel mining major- Sumitomo Metal Mining Co. has predicted that Nickel will end in deficit during 2015, the first time in five years. The demand for the metal will outpace production by 12,000 metric tons during the year. The company predicts notable decline in supply from China. The global output of Nickel had ended in surplus of 36,000 mt during last year.

According to Hiroshi Sueta, General Manager, Sales and Raw materials Department, the ore stockpiles in China are most likely to get exhausted by mid-2015. The Chinese Nickel Pig Iron (NPI) output is likely to decline 15% year –on-year to 365,000 tons in 2015. The Chinese NPI production had dropped 4.4% in 2014. After Indonesia imposed ban on exports of processed ore, China had boosted imports from Philippines. In order to meet the excessive demand, the country also had destocked ore inventories in large quantities.

Sumitomo further anticipates the global nickel demand growth to slow down to 4% in 2015 from 7.4% in 2014. The sharp fall in oil prices have reduced the intake of the metal by energy producers for use in pipes and tanks. Meantime, the global nickel output is forecast to increase by 1.5% during 2015 to 1.99 million tons.

Meantime, LME Nickel for delivery in three months jumped higher by 1.8% to $15,165 per ton on Jan 30th.

MCX Holiday Schedule 2015

Trading Holidays

Proposed list of trading holidays of the Exchange for the calendar year 2015 Sr. No. Particulars Date Days Morning Session (10:00 am to 5:00 pm) Evening Session (5:00 pm to 11:30 /11:55 pm) 1 New Year’s Day 1-Jan-15 Thursday Open Closed 2 Republic Day 26-Jan-15 Monday Closed Closed 3 Mahashivratri 17-Feb-15 Tuesday Closed Open 4 Holi 6-Mar-15 Friday Closed Open 5 Mahavir Jayanti 2-Apr-15 Thursday Closed Open 6 Good Friday 3-Apr-15 Friday Closed Closed 7 Dr. Ambedkar Jayanti 14-Apr-15 Tuesday Closed Open 8 Maharashtra Day 1-May-15 Friday Closed Open 9 Budha Purnima 4-May-15 Monday Closed Open 10 Independence Day 15-Aug-15 Saturday Closed Closed 11 Ganesh Chaturthi 17-Sep-15 Thursday Closed Open 12 Bakri ID (Idu’L Zuha) 25-Sep-15 Friday Closed Open 13 Gandhi Jayanti 2-Oct-15 Friday Closed Closed 14 Dusssera 22-Oct-15 Thursday Closed Open 15 Diwali - Laxmi Puja 11-Nov-15 Wednesday Closed Open from (6 pm to 8.30 pm) 16 Diwali – Balipratipada 12-Nov-15 Thursday Closed Open 17 Guru Nanak Jayanti 25-Nov-15 Wednesday Closed Open 18 Id-E-Milad (Prophet Mohammad’s Birthday) 24-Dec-15 Thursday Closed Open 19 Christmas 25-Dec-15 Friday Closed Closed

Commodity Market Holiday Schedule 2015

Date                 Holiday                 Market Closed*
Dec 25 2014 Christmas Holiday (Observed) LME/ COMEX / NYMEX
Dec 26 2014 Boxing Day LME
Jan 01 2015 New Year's Day (Observed) LME / COMEX / NYMEX / SHFE
Jan 19 2015 Dr. Martin Luther King, Jr. (Observed) COMEX / NYMEX
Feb 16 2015 Presidents Day COMEX / NYMEX
Feb 18 2015 Spring Festival SHFE
Feb 19 2015 Spring Festival SHFE
Feb 20 2015 Spring Festival SHFE
Feb 21 2015 Spring Festival SHFE
Feb 22 2015 Spring Festival SHFE
Feb 23 2015 Spring Festival SHFE
Feb 24 2015 Spring Festival SHFE
Apr 3 2015 Good Friday LME / COMEX / NYMEX
Apr 6 2015 Easter Monday LME
Apr 06 2015 Tomb-sweeping Day SHFE
May 01 2015 Labor Day SHFE
May 02 2015 Labor Day SHFE
May 03 2015 Labor Day SHFE
May 4 2015 Early May Bank Holiday LME
May 25 2015 Spring Bank Holiday LME
May 25 2015 Memorial Day COMEX / NYMEX
Jun 20 2015 Dragon Boat Festival SHFE
Jun 21 2015 Dragon Boat Festival SHFE
Jun 22 2015 Dragon Boat Festival SHFE
Jul 3 2015 Independence Day COMEX / NYMEX
Aug 31 2015 Summer Bank Holiday LME
Sep 7 2015 Labor Day COMEX / NYMEX
Sep 27 2015 Mid-autumn Festival SHFE
Oct 01 2015 National Day SHFE
Oct 02 2015 National Day SHFE
Oct 03 2015 National Day SHFE
Oct 04 2015 National Day SHFE
Oct 05 2015 National Day SHFE
Oct 06 2015 National Day SHFE
Oct 07 2015 National Day SHFE
Nov 26 2015 Thanksgiving COMEX / NYMEX
Dec 25 2015 Christmas Holiday (Observed) LME/ COMEX / NYMEX
Dec 28 2015 Boxing Day LME
Jan 01 2016 New Year's Day (Observed) LME / COMEX / NYMEX / SHFE

* COMEX/NYMEX early closing on any business day preceding a holiday.
Oil and Gas close at 1:00 PM; Palladium closes at 12 noon; Copper and Silver at 12:05 PM; Platinum and Gold at 12:10 PM.

Speculators hike bearish copper bets as mood darkens - CFTC

(Reuters) - Hedge funds and money managers increased their bearish positions in copper futures and options to a four-month high and raised their bullish bets in gold to their highest in just over two years in the week to Jan. 27, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.

In silver , they increased their net long by 6,539 lots to 40,164, the highest since July last year.

Hedge fund and other speculative investors increased their net long in bullion by 21,960 contracts to 167,693, the most since late November 2012, while in copper, they increased their net short by 4,970 to 12,976, the highest since early October last year.

The higher net short in copper may leave the market vulnerable to a short-covering rally if any positive macroeconomic news comes out of China, the world's top consumer and producer, after the weeks-long selling that has wiped 16 percent off the value of copper since the start of the year.

While some traders say the selling has been overdone, many point to slowing demand from China as the reason to reduce exposure for now. March copper futures on COMEX hit fresh 5-1/2-year lows on Monday.

In stark contrast, bullion has been on a tear as the oil and base metals rout and the euro-zone instability have reignited its appeal to investors even as the dollar remains strong and the U.S. Federal Reserve reins in its years-long stimulus program.

India reclaims top spot as No. 1 gold consumer

India is back to being the number one consumer of gold, knocking China off the top of the podium as the country that consumed the most bullion in the form of gold bars, coins and jewelry, in 2014.

The latest update of the annual study by GFMS of world gold supply and demand found that sliding demand from China – which grabbed the top gold consumer mantle from India in 2011 – is behind the shift.

The report by GFMS analysts at Thomson Reuters showed that Chinese gold demand dropped by over a third to a four-year low of 866 tonnes, while scrap gold supply rose to a new high of 182 tonnes.

Slower economic growth and a crackdown on corruption conspired to cut Chinese jewelry demand to 608 tonnes, a full 33 percent below levels seen in 2013, the report said. Demand for gold bars fell 53 percent to 171 tonnes, a five-year low. An overhang of gold in the Chinese market during the voracious buying that occurred in 2013 was also a factor in keeping purchases subdued, according to GFMS.

Some analysts, however, question whether the numbers in the GFMS report tell the whole story.

Mineweb's Lawrence Williams noted that data from the USGS shows 32 percent of US gold exports in October went to Mainland China rather than through Hong Kong, the normal entrepot for bullion destined for China. Other export flows, especially from Switzerland, are going direct to the mainland. "[O]verall this suggest that Chinese consumption may be considerably higher than the GFMS report appears to suggest," Williams writes.

Meanwhile in India, jewelry demand in 2014 rocketed up 14 percent, to a record 690 tonnes, placing the country ahead of China as the world's top consumer of gold jewelry.

That trend was first noticed back in November when Indians bought 39 percent more gold in the run-up to Diwali and the start of the traditional wedding season.

A weakening of gold prices in rupee terms last year also boosted gold demand in India, along with confidence in the new government led by Narendra Modi, according to a World Gold Council report released mid-November. The country has also witnessed a significant increase of gold smuggling since the government ratcheted up restrictions and taxes on legitimate imports of the precious metal.

Other key findings of the GFMS report:

• the gold market is currently in surplus, a situation that is expected to continue due to further liquidations from gold ETFs.
• gold mine production rose last year by 2 percent, to a record 3,109 tonnes. However GFMS does not anticipate production to increase much this year, with most large gold mines now on stream.
• mining companies are returning to net gold hedging, which was around 42 tonnes in 2014.
• GFMS sees the gold price averaging $1,125 an ounce in the second quarter, rising to $1,160 in the second half.