China planning to step up controls on coal imports — report

Businessweek reports on the day it cleared and matched its first gold trade the London Metal Exchange which handles some 80% of global trade in metals futures, told members on Tuesday that it has receive "many" expressions of interest from potential bidders. The 134-year-old exchange is facing increased competition from other exchanges in Asia and is plagued by a backlog of industrial metals particularly aluminum that’s building at warehouses. LME-monitored warehouses contain 6.7 million metric tons of metal and at some warehouses such as Detroit it can take as long as seven months to withdraw metal. The LME is looking to start trading silver next year.

US stocks were driven down at Tuesday’s start with the Dow Jones falling as much as 250 points as Belgium's Dexia become the first Eurozone bank to be bailed out before making a dramatic about turn during the last hour of trade to end up 153 points or 1.4%. The S&P 500 dropped shortly after the opening bell only to end up 2.25% at 1,124 points, but is still down 18% over the last four months. The resource-heavy TSX composite index were almost at a two-year low before making up some of the lost ground to end down just two-thirds of a percent. Gold could not capitalize on the ongoing volatility and fell further after hours to trade at $1,623/oz. Bullion had briefly dipped below $1,600/oz before noon.

Aleksandra Tomczak, writing for the World Coal Association, says the European Commission is supporting World Bank funding for a new coal-powered plant in Kosovo.

The Independent reports the first coal to be mined in Newcastle upon Tyne for more than 50 years could be dug on the site of a 21st century science park ahead of construction. Up to 60,000 tonnes of coal lie below what was a brewery until recently. The area was mined extensively in the 18th century and the various workings underneath make present-day building work perilous.

US stocks were driven down at Tuesday's start as Europe's debt troubles and the US employment outlook continued to rattle investors' nerves. The the major indexes were down for a third session and the S&P 500 Index SPX entered bear market territory, off 20% from its April high. The Dow Jones Industrial Average fell more than 200 points to 10,435. The S&P 500 dropped 1.7% to 1,080 and the Nasdaq Composite Index came off lightest, down 20 points. The resource-heavy TSX composite index fell more than 2% to hit a 20-month low of 11,006 shortly after the open. Unsurprisingly the carnage was greater in the Eurozone where the major indices in London, Frankfurt and Paris all lost more than 3%. The crude oil market declined further with US futures down 2% to under $76. Gold could not capitalize on the uncertainty and traded $10 lower at $1,647/oz.

CME Group, which operates the largest  US futures exchanges, will from today increase to $500 million the amount of physical gold its US clearing members can post as collateral for margin requirements, more than double the existing $200 million. The Chicago-based firm which first accepted bullion two years ago is the latest of a number of  exchanges including IntercontinentalExchange and other financial services companies like JP Morgan that accept the use of gold as collateral, which essentially places the precious metal in the top tier of asset classes alongside government bonds and currencies. The World Gold Council is also lobbying to have the Basel Committee on Banking Supervision  do the same, which could have widespread repercussions for bullion.

After crashing through the $80/barrel level on Friday, the price of US crude oil fell further on Monday to trade just above $76/barrel, the lowest in a year, sending the shares of the biggest oil sands players into a tailspin. Suncor tumbled 5.5% and the oil sands bellwether has now lost a staggering $70 billion in market value since its pre-recession high set in May 2008. Canadian Natural Resources gave up 5.6%, Imperial Oil shed 6.5% while Cenovus lost 4.1%. Canadian heavy oil – exported only to the US due to a paucity of pipelines – sells for $10.50 less than US crude and trades at roughly $35 below the international benchmark, meaning oil sands developers have to deal with an effective oil price of $65 and change and now sell some of the cheapest fuel on the planet.

The price of coking coal is likely to remain buoyant despite a recent price cut by Wesfarmers and softening Chinese demand for steelmaking inputs. Wesfarmers, an Australian conglomerate based in Perth, over the weekend cut the price it receives for its Curragh coal to US$280 a tonne over the next three months. The move prompted analysts to consider whether coal, like several commodities like copper, nickel, and zinc, is the next domino to fall as slowing global growth pinches commmodities.

E-mails between the State Department and TransCanada, the company behind a $7 billion proposal to build a pipeline between Canadian oilsands and Gulf Coast refineries, demonstrate "a sometimes warm and collaborative relationship," states a report in today's New York Times. The e-mails, the second batch to be released in response to a Freedom of Information Act request filed by the environmental group Friends of the Earth, show a senior State Department official at the United States Embassy in Ottawa procuring invitations to Fourth of July parties for TransCanada officials, sharing information with the company about Secretary of State Hillary Rodham Clinton’s meetings and cheering on TransCanada in its quest to gain approval of the giant pipeline, which could carry 700,000 barrels a day.