Morning Mumble: Oil and Metal woes, Diageo (DGE), China (PMI) & KMR pricing assumptions + Dialight (DIA/Dire)

Good Morning,

With the realities now being acknowledged within the commodity sector (and the analysts) the cycle is starting to enact change, with yesterday's piece in the FT Oil groups have shelved $200bn in new projects as low prices bite and Gulf news Projects worth $200b cancelled due to low oil prices. One suspects the latter was a twist on reporting from FT and CNBC. The theme being in both oil and metals, there is a headwind of efficiencies and stress on suppliers, whether labour or capital equipment. (Impact for support services?).

Having had the opportunity to meet up with a few on Friday, as the chap morphed into a three, its quite clear the consensus is now aware of what can be only described as an anomaly in China's data disclosure. If the GDP disclosure matched that of SEO's public records on profits, then one would perhaps be forgiving. 

In discussions with Li, SEO's are being somewhat generous with the facts of their profits. What has been disclosed is an outright reduction in revenues and profits, contrary to the GDP suggestions.

One could even argue that, if the accounts were fully public, we'd all have to turn into a forensic accountants. The recognition of revenues and profits including those on "goods in transit" to suppliers is near a farce. Something that perhaps capital equipment manufacturers in America have taken lessons on, or with humour, perhaps they've learnt from Diageo (DGE). We'll come back to that another time (Bloomberg: Diageo queried by SEC).

This is the latest for Diageo, earlier in the year as they resorted to a negative cashflow model for all their suppliers, by paying them after 90 days. Something supermarket suppliers have been accustomed to. DGE is under pressure to turnaround a company that has contracting market share in North America. It’s hoped higher prices will offset this, but perhaps they would be wiser to react to market trends than they have been. Being slow to react to flavoured this and that, whilst also offering conventional drinks. The concern being, have Diageo stuffed their supply chain? A temporary beat followed by misses, albeit small, time will tell. 

The market is now nervous of this rout in commodities, with the larger trading houses withdrawing from positions across the board. This is being in part replicate in agri-commodities (Agricultural Commodities). Simply, because we like simple here, the demand for commodities has contracted, more so, rather than keep a healthy balance of stocks, Chinese companies (whether state or private) have learnt from their iron ore trading comrades. Commodities are not in short supply, as the grab for Nickel pre Indonesia's unprocessed ore ban has made them realised.

The question that is now being considered, "if China isn't suffering to the level the west has been informed?" Why is there a categorical absence of speculation on Commodities (deleveraging and margin contraction)? What could be described as a temporary quad-divergence in pricing, demand, production, supply and stockpiles. There appears to be a full on headwind of over-supply, reducing demand, reducing prices and deleveraging, whilst an absence of speculation. On the flip the side, the dollar is talked up, torching those higher cost producers. 

The Caixin Flash China General Manufacturing PMI™ should perhaps be considered the most accurate PMI data for some time. Not only on the basis of a greater understanding of the Chinese economy, but more so the employment concerns that are rising in China. Perhaps the wider press would hire the odd drone hobbyist to fly over a few areas where capital equipment is stored awaiting sale. 

What does the deflationary impact and subsequent deleveraging means on a global scale? Last time the contraction occurred, there was a significant downturn and prices tanked. Whether commodities will go as low is another question, but more importantly, the bulls are not expecting a stockpiling (yet). Whether on leverage (margin), financed deals or more importantly on the bottom line there's something missing. We shall of course be somewhat fixated with the retrospective downgrades in sector and those associated. 

Last week, we have gossip of African consolidation in the Oil and Gas sector, which may actually be more credible and having potential. We had Aggreko (AGK) whom have now shown they are not immune to the cycle of power generation. There's one brave chap that believes 645 pence or thereabouts is what AGK is valued at...whom I am I to disagree. Date for diary, Interim Results for the six months ended 30 June 2015 and its Business Priorities on Thursday 6 August 2015 at 7am (BST).

AGK, may have some resilience and it's perhaps premature to suggest 645 pence is a decent target. After taking on debt to return monies to shareholders, this is just one company that is going to suffer with a focus on its own equity and margins. With AGK's exposure to shale, EMEA and Asia, Pacific and Australia (APAC), whilst considering Japan, revenues are now under pressure. APAC revenues are reliant on a mining model...whilst also being exposed to New Zealand, and Indonesia.

Aggreko is now suffering from previous FDI, in all their operation areas, where energy generation shortfalls have been addressed. AGK's cycle means they're more than likely to survive, whereas APR will, but with a different valuation and reduced ability to generate to revenue (profit). This will be read across the market about cashflow and leverage (debt).

On a similar theme, one had thought Kenmare Resources (KMR) had rented some diesel-powered electricity generators from AGK. Perhaps they can remain fully operational during the Southern Hemisphere summer months of December, January and February when supply is most unstable but not any other times? Were these generators not meant to be on stand-by? Insufficient? 

Iluka Resources, whom have cleverly engineered a waiting game. If Carlsberg did takeovers, Iluka Resources would be the model. They've sat back and let Kenmare Resources (KMR) destroy their value and any argument for a price increase. KMR should simply roll-over. Today's Q2 & H1 2015 Production Report is dire, over to KMR,

Overview

• H1 2015 production was constrained by 57 days of storm related grid power outages in Q1 and sporadic power outages in Q2, as a result of remedial work to the power line.
• Power stability is expected to improve significantly following the installation of new power infrastructure in Q3.
• Ilmenite production in H1 decreased 27% to 324,100 tonnes (H1 2014: 445,600 tonnes).
• Zircon production in H1 increased 11% to 23,800 tonnes (H1 2014: 21,400 tonnes).
• Total shipments of finished products in H1 increased 3% to 412,000 tonnes (H1 2014: 399,000 tonnes).
• Cost control measures succeeding and achieving significant cost savings.
• Project Loan Amendment dated 29 April, 2015 now effective.

Statement from Michael Carvill, Managing Director: 

"Production in H1 2015 was severely impacted by weather related power outages in Q1. Production in Q2 improved, though remained hampered by remedial work to the power line and unofficial industrial action in June - reducing operating hours for the plant. The outlook for production in H2 looks stronger as the national power utility commissions equipment that will increase grid power capacity and stability."

Date for diary, 28 August 2015.

The positive for Iluka/KMR is ilmenite is likely to have some positive support over the coming year. With Chinese domestic production reduced significantly. Remembering that ilmenite is a by-product of Chinese iron-ore mining, with their costs and any by-product credits making production unwarranted. With costs under control, the electrical issues need to be fully considered. If Iluka are to do anything, it will be sooner rather than later. 

With the appointment of John Ensall as the Lender Approved Non-Executive Director. We could "perhaps suggest" a few areas where some savings could be made. With the board costing near $2.2M year, is a little headroom, save $1.5m attributable to three directors. 

Lonmin (LMI) continues to fall, flying through the FTSE 350 quicker than it did 250. LMI needs cash at all levels and with its work force and furnaces now considered a liability, one would be wise not to catch the knife. It'll no doubt bounce or be bought out, does anyone need to rush or pay much of a premium? We'd be surprised. 

With Nickel dropping below its key $5/lb support level, should we start to consider the likes of Horizonte Minerals (HZM). with their price assumptions on the PFS. Remembering its sensible to sell projects on past economics with "headroom" and cream for an increasing price  Just how much cash does the company have left? EMC: HZM Sarcasm, how times change both in Nickel and viewpoint. From previously being a bull in the Nickel space, when the Chinese withdrew from being a buyer in the Market (October 2014). 

At the weekend I was asked about my view for Dialight (DIA), today's  half yearly report validates the . EMC view (January 2014) and EMC June 2015 . Although as we're now being respectful, we'll ignore the abuse at the time. Its certainly getting there, and the view has not changed. We call this progressive long-term investing, just short. Perhaps one could be described as a stale short in DIA?

Atb Fraser

Hopefully it makes sense...

Morning Mumble: China + Gold...AAL's / JSE: AMS hand count of PGM's. Rambler's talking of expansion! + RUR's default.

Good Morning, Forgot to press publish this morning, Good Afternoon,

It’s hard to start this morning due to there being so much to cover and little time. 

Everything is going on in China, on the stock market, in the economy and the slowdown in development (read as reducing investment). How's that for economic analysis?! In essence there is no fiscal policy that will not be considered by China to maintain the economy.  

The long fated transfer of wealth between Government and citizen/comrade has now stalled, including the Chinese people's investment in mainland China generally. With monetary outflows from China increasing both directly and via the Shanghai-Hong Kong Stock Connect, the Government is left having to fill the void/gaping hole. Orders are on the increase from mainland China to the Honk Kong (Southbound), where the mature market is allegedly benefiting from greater disclosure and transparency. 

With China catching a cold, those Asian trading partners (south-south trade) are under pressure. What this means for those recently listed, including Alibaba (NYSE: BABA), is yet to be fully determined. BABA will not be exempt from reduced ordering and trade efficiencies that are put in place (read as reduced wastage).  Also likely to have a knock on for Standard Chartered (STAN), whose capital requirement rumours are being raised again, after today's new management changes. How much does STAN need? Although more recently STAN have developed a conservative approach to lending.

Often when looking at the realistic view of China, people mistake negativity or a lack of positives as being the end of the world, rather than resetting expectations. Some brokers, whom were so bullish when attending Camp AV last year (2014) are now reassessing their position on China. One would be wise to consider the notes from Aviate et al (China once upon a time bull's), and look how it’s turned out in 13 short months in comparison to the bullish predictions. 

The drop in construction both residential and commercial, has serious implications for the Chinese economy, throughout the entire supply chain both materials and labour. Factories’ own inventory levels are rising, not helped by lower gate prices. Steel mills producing above and beyond demand but "committed" to certain higher cost Government obligations or funding gets withdrawn. 

Precious Metals are all under pressure (EMC: Gold the “bears” will have this market for longer), the falls in Asia one suspects are a result of a certain trader cashing in their chips. 

Gold: $1116/oz (had been as low as $1080/oz. as knife catchers entered the market). 

Silver: $14.80/oz (had been as low as $14.55/oz.)

Platinum: $980/oz. (had been as low as $970/oz.)

Palladium: $605/oz (previously touched $600/oz.)

Copper: $2.4650/lb 

China is giving an appearance of confidence, with their stock market measures attempting to entice the public to buy into the story. Having committed near $200b of funds in a month or so to margin/equity, its merely propped up the fall. Whilst holding fire on a further $275B worth of equity rescue, (Bloomberg: China Securities Finance Corp ($483B) funding to imply support.

China's latest vote was to release its gold figures. Not only did this conveniently happen on Friday with near 1,658 metric tons of gold under the security of PBoC (remember that phrase it may be important). We'll ignore why China hasn't released any gold figures for near 5 years, and leave that for the conspiracy theorists that make little money. What is important though is the disclosure for the purpose of the IMF (International Monetary Fund) SDR (Special Drawing Rights) for the Yuan. Expect a revision upwards of Gold holdings in due course from China. 

In entire contradiction, the crash in Gold. Another Fund having a coup on the Shanghai Gold Exchange catching most off guard. Whether the seller had other obligations that prompted the sale, is immaterial to the action of resetting the pricing a la Copper (14th January 2015), in addition to shorting Gold. Selling 160K ounces is not to be sniffed at, especially during such quiet trade and limited volumes. What are the implications for CitiGroup who’s trading in precious metals has near quintupled in 4 short months with around $45-50B exposure.

On to the market, Anglo American Platinum Earnings Reconciliation by Anglo American, is almost laughable. It raises significant questions over how Anglo Plat's recognising its inventory. After, a physical count of in-process metals (in the ordinary course of business) resulted in the Company increasing its estimate of the quantity of inventory by an additional c.130koz of platinum and 75koz of palladium. Source: Anglo American Platinum Interim Report Anglo Platinum (JSE: AMS). AMS already down 4% from opening. 

From Anglo Plats ...continues with the repositioning to create a high quality asset portfolio, with low cost and high margin production, low safety risk and high mechanisation potential. The assets that do not form part of the retained portfolio are part of the disposal program. 

If anyone is minded, could they pleased identify the "high quality assets" to save significant investigation time. At current prices, the read across to all the producers with platinum at $980/oz. isn't looking great, Lonmin must have near 6 months before the desperation of cash comes to the fore, if it hasn't already. 

Rambler Metals and Mining (RMM) Pre-feasibility Study has a number of assumption in it, although better than some! RMM, Average copper price of USD $2.79 per pound, gold price of USD $1,100 per ounce and silver of USD $15.54 per ounce. Long term pricing of USD $2.79 per pound, $1075 per ounce and $15.50 per ounce for copper, gold and silver respectively. 

RMM hopes to fund most of it from bulk mining Footwall Zone (LFZ), which is allegedly self-funding from current operations (Circa $66M). Even so, there's a capital short-fall of near $9M and assessing possible debt fundraising has been initiated. The funding plan does not make economic sense on the 5 year plan. With more risks created by the self-funding rate over 5 years. Debt-financing alone does not stack up, especially in the current environment so will there be a % of equity dilution/warrants or associated kickers to entice the backers. 

Having not covered RMM since EMC: RMM 9th December 2014. With the denial contingent still suggesting things can get better. One has to question how much of the cashflow supports financing at current prices. This is likely to be RMM's last chance, in the absence of a rebound in RMM's produced commodities, there's a requirement for cash for this expansion. With a modest improvement in grades more recently, RMM are likely to be able to "sell the story." Any purchases would only be high risk speculation in the current market.

More news for Rurelec (RUR) today that was missing two little words in the title, "loan default." RUR announce the appointment of directors, but update on the default that has taken place. Expect a roller-coaster of a ride for anyone still holding! 

Atb Fraser

Morning Mumble: SHCOMP/SZCOMP farce. Gold & Silver's weakness despite demand (Same for Commodities) and Amur Minerals (AMC), MONI

Good Morning,

If your house is going to be flooded and some rooms are cut off, you save possessions from the rooms you have access to. The exact same thing is happening on the Chinese markets as a result of further trading halts by companies. Traders or blind speculators are saving what they can, whilst the behemoth type stability funds buy large stocks directly or via ETF. 

FT China steps up efforts to halt stock market rout, and wider market are now reported what was widely known on the trading floor and here. The PBOC (People's Bank of China) funds are being utilised by the China Securities Finance Co. (CSF) (CSFP was previously used here but to keep in line with wider commentary the "P" has been dropped) to buy stocks direct in the market, as well as provide margin liquidity to brokerages. The total sum of the parts is approaching $140B, this should be called another form of QE.

On the one hand you have oil dropping, but perversely PetroChina is breaking ranks and staging a bull-run of legendary proportions. Tacking on near 25% price appreciation as the "stability" band aid funds buy less risky investments. So as a trader, you'd sell anything that isn't being bought and buy what the Government/Funds are buying, or run for the hills? 

With promises of improved margin and the like, the rule of 5% short is near non-existent. Li cannot get a short on for love nor money, with technical problems and various other 'reasons'. The Government is attempting to stop any form of selling, from suspension to undertakings from large brokerages (24 now) not to sell. 

Well some are adhering to the no-sales-agreement, but limited time to explain what is happening on “opening", for which followers should check. Simply, China collectively buys stocks the herd are running to the door with, the likes of Yeast Angel and then post lunch the price tanks as the buyers disappear but it’s not 8% down, only say 4%. That's if the entire market isn't in a trading halt by the end of the week. 

There's a number of brokers that have serious liquidity problems. Some of those were "told off" for excessively lending and rolling over positions only 7 months ago. The gossip is they've blown up (financially a la CHF) because clients are unable to liquidate positions that may have been in profit, because they're suspended and are unable to cover serious losses. Until the brokerages have been able to access emergency margin provisions put in place by the CSF, 'traders' accounts' will remain suspended. Another win for the policy makers, limiting sales!

Yesterday, with safe havens been sort in the west in light of China and the EU boil that needs lancing, Greece. Silver was surprisingly weak, the obvious shall occur for those leveraged silver producers we love to kick on weakness (HOC/FRES). The same for gold, with a modest bounce well below what was expected. 

It looks like American Futures traders have such large positions (short) that any headwind of buying is wiped out. The decimation caused by the over-speculation a few years back, has left the gold market unbalanced. Some traders committed such levels of $ in 2012/13 that the thought of speculating long has left the market void. 

The last time the mint ran out of Silver in November 2014, the price spiked near 20% over three months, the same happened yesterday. The difference being the entire absence of Chinese speculators in commodities, the “bears” will have this market for longer. The Chinese cashed in significant positions this week, no doubt as their margin was squeezed in the equity positions, liquidating positions in Nickel, Silver, Iron Ore, Tin and pretty much all commodities. 

The prime example being Nickel, where the Chinese are happy to accept near physical spot prices, with limited futures trading the price fell through the $5/lb support like a brick. Same for Iron Ore, price setting iron ore outside of the market at $45/t well below the market $49/t. With the usual suspects, Rio Tinto (RIO), BHP Billiton (BLT) and Fortescue Metals Group (FMG) all taking a kicking. 

FMG is entirely absent of any support for obvious reasons, being the higher cost producer of the majors. At AU$1.67 a share the $2 support is but mere history, with $1 a share likely, but wisdom dictates to take profits. One hopes those Atlas Iron holders don't hug this stock through the pain, although riskier for the bears with the possibility of event risk.

For those with a memory on this Wednesday morning, Rio is only 240 pence off the 12 month target of 2200 pence, with most Companies tapering back their assumptions / targets to circa 2800-3000 it may just be still too much. It was Deutsche Bank at 4200 pence at the time that raised a few eyebrows a year ago. That case of wine will be thoroughly enjoy from a good sport whom accepts differing opinions are positive for the market. 

The above a complete validation for conviction short Amur Minerals (AMC). The company is still over-valued on all levels. Admittedly depreciating quicker than anticipated but far from complaining. The project is uneconomic and after yesterdays' fall, and the company is "perhaps" worth cash.  

This nicely brings us on to Monitise (MONI) whom are the unfortunate beneficiary of another selling shareholder. MONI inform us that they have been notified by Visa Europe...that it will reduce its shareholding over time while continuing to work with the Company throughout the duration of its current commercial agreement. Those holders in the stock will be used to a declining SP, so perhaps an opportunity to average down further and then hug the stock? Better still embrace the “2016 profit forecast!” Cash is king, and MONI burn it like no tomorrow and whether its profitable or not in 2016, the positive cashflow may not be! 

Some bizarre events on Aga Rangemaster (AGA) today...more later perhaps. With gossip of the deal being off...surely the company would have updated!?!

Atb Fraser

Morning Mumble: Carry Trade Dynamics under Capital Controls: The Case of China by By:Zhang Xiao and Christopher Balding. 27 June 2015.

As promised: 

Carry Trade Dynamics under Capital Controls: The Case of China

PM Bolt on: LEX. Miners: Where to be in a world of low commodity prices?

Good afternoon,

Today I afforded myself a treat with 1 hour of Miners: Where to be in a world of low commodity prices? Some food for thought there today that needs some consideration for those in the cycle of investing. For myself, dull for others, it was an enjoyable session. 

Atb Fraser

Evening Bolt on par deux: Or converse morning Mumble...AFR, gold,

Good afternoon, 

Having been in meetings this morning, it’s refreshing to be out in the big wide world. With some sensibility about the place and the FX issues becoming more transparent with huge kicking to those whom were long GBP Vs...pre-the-Swiss-roll (WHY!?!?!?!) Seems some banking updates might need a little clarification post their most recent results. A not uncommon situation where analysis of your market always pays off. 

There's still a lot more to come with commodities in terms of volatility it won't be the last we hear of the situation. Once again, it’s with disappointment that another shorting fund has been outed, long may the press not break the status quo. 

Speculation about the PUSU (put up shut up) takeover requirements for Afren expiring on Monday (Jan 19, 2015), with 3 other suitors its rather irrelevant because they would only be exempt until another offer materialises; who wants to make the move first offer (poker faces required). 

With a rumoured three suitors, one of an opaque entity allegedly Chinese (ZhenHua Oil albeit owned by China North Industries Corporation (NORINCO)) but actually on behalf of Liberian businessmen Bert Cooper. Perhaps we could as Mr Yuan at Forte energy! As reported by Agence Ecofin - Le nigérian Seplat Petroleum confirme son appétit pour Afren last Friday (Jan 09, 2015) and SEPLAT (SEPL) (although I am preferring Seplay!). The question is how much...with limited skin in the AFR its not something worry about too much until trading opportunities present (deal on or off)

With gold now heading above the crucial $1268/oz. support (approx.), its looking more probable on three very savvy investors set to make circa $117m EMC See: larger bets going in on NY and Asia for a material tick up some $100+/oz. This could just be the lowest cost trade of the year. 

Final thoughts for the weekend goes to oil predictably appreciating but what is the read through for Unilever, Nestle, Proctor & Gamble, surely an improvement in production and operating costs? Over to the analysts. 

Tonight is legalised gambling which will result on my counter-party gaining all my offerings, I suspect I shall require a Gift Aid contribution judging past-performance. 

Atb Fraser

Morning Mumble: Food Prices (partial), CU lower soon + Market Items

Good Morning,

Apologises for the delay, Game Digital (GMD) stating the obvious sentiment in margin and bundles in the Christmas trading update. Many thanks to the GMD IPO (although a repeat listing) aiding 2015. Along with KAZ Minerals the short benefiting today's market joys with Credit Suisse yesterday commencing the kicking. 

VED (Vedanta) ( as EMC'd yesterday) was known to be closed early, it had hit the target price for a long term short circa 7 months. It does need a revisit for intra-trading but one has to take money off the markets with strict discipline. Its a muppets disease not to bank significant profits and that includes the institutional readers whom think the trend is forever, yes you too can be a Muppet. Glencore, my short on the basis GLEN's (Glencore) copper beliefs were out of touch with the market nevermind their "tear" of assets (poor I know). 

The herd shall follow in due course, but its wise to consider their coverage if they cannot get the obvious right. With coal getting a kicking again...GLEN's earnings are looking that great with greater capital intensity. Kudos to Liberum Capital whom I suspect didn't expect 240 pence, Investec might need to review their switch from Rio to GLEN

Below are some brief out-takes for something I did in June 2013/Jan 2014 and July 2014, for which I've adapted this morning. For those that know about Pork Riblets, Semi-Meaty (I'm trying to make it sound luxurious)...December has been the hit by a quadruple whammy that has continued unabated, positive for the pocket and for retail sales and more so if the trend continues. Retail will see cheaper goods (consumer durables/white goods) and higher demand as well (see  EMC thoughts on shipping costs) with greater disposable income. Global deflation/zero inflation is a risk to western economies more so than developing countries. Save for the developing nations weakness in currency (about time I must say) eroding a good 50% of any price price reductions.

So with oil now mirroring a lot of commodities with speculation being stripped out to leave a realistic market (over supply) even in the short-term, copper as the indicator of growth has fallen back. Readers cannot say they were not given the warning  in November/December. So the indicator (Dr Copper as most refer to it) of global health is pricing in more realistic growth patterns (see Chinese trade growth) nearly bang on my estimates at CampAlpha). Even with the EU's intentions of Economic stimulus etc...America's demand may however support China (perversely). 

So with the decline in commodities positively impacting on food prices for the consumer both in agriculture (inc fertilisers and other associated harvest costs), supply chain logistics (in its entirety) and point of sale costs (including energy and staff costs re: recent hourly rate declines in the US), there's only one likely beneficiary. This theme will continue for some time, with the FAO (Food & Agriculture Organisation of the United Nations) indices mirroring (to a degree) iron ore and belatedly copper. Other sources but limited time so apologies.

See FAO Food Commodity Price Indices (left), showing significant drops in prices there's a real risk of further drops as bio-fuels are awash in the market and with limited / static demand creating a surplus in animal feed as well the alternative demand does not look positive either (grain feed/food ingredients). Plus a significant pressure on the fertilisers likely to drive costs/prices lower as producers hold out for better deals and the market being in oversupply (although recently tightening). 

With record harvests across feed grains, soya and meats (if one is allowed to call them a harvest), save for coffee(long), Cocoa (only short-term) and citrus fruits (Florida Harvest issues inferring one of the worst crop every. Prices are set in trend for the next 12 months save for any major issues. We have Soybeans dropping 3.6% After USDA Supply Report (WSJ) So for the dinner party live enthusiasts you will finally not have to pretend to substitute meat for your vegetarian guests. 

The global super-cycle is moving through commodities to food and is taking hold . With commodities the first to give, then food prices, forcing the factory gate prices in decline. (Simplified version). When considering the below, also consider the global impact both to Grocers but also to the consumer. 

Just a summarised bit on what I'm able to share in terms of food prices, please feel free to ignore or digest (I know).

Today we saw the risks presenting in copper with the tank, EMC copper's real risk could not have summed it up better, taking larger positions on the way down...in the absence of any support $2/lb. is the next station. 

Limited time for the other items. Its worth commenting on the iron ore price for those thinking the summer would last longer. All the majors were down, save for Atlas Iron the second coming, with massive volume, it would be wise to pause and plan (you vultures!). With the energy crisis of over supply (Energy rout I think CitiGroup called it) guess what's happening with Coal. With a few changes to increase the liquidity in LME coming into force on the 19th of this month, traders would be wise to read the manual:-).

Risk off? Gold on? hitting the support line of $1239/oz and retreating quickly. Cost deflation is going to impact gold, its only a matter of time!

Atb Fraser

It would have been respectful for certain individuals to acknowledge the source of their information in emails, reports and articles rather than just copying and pasting.