Climbing nickel output to cast shadow on prices

Offer prices for iron ore dropped to three-week lows, reports Reuters, with steelmakers in top producer China mostly staying out of the market amid thin demand. Despite the low steel demand limiting Chinese buying interest, Vale SA said that it expects valemaxes, the world’s biggest iron-ore carriers, to eventually be allowed into ports inChina, the biggest user of the commodity.

Century Iron Mines, an iron ore miner with projects in Quebec and Newfoundland and Labrador, has reached a $120 million development deal with WISCO Resources, one of the third largest steel producer in China. WISCO Resources, which holds an approximate 25% interest in Century Iron, will invest $120 million in exchange for a 40% interest in three of Century Iron Mines' projects, Duncan Lake, Attikamagen and Sunny Lake. Funds will be used for exploration and development. WISCO Resources is a major subsidiaries of Wuhan Iron & Steel Corporation, headquartered in Wuhan in the province of Hubei in the People's Republic of China.

China's Ministry of Industry and Information Technology (MIIT) is drafting new standards for the gold industry which will raise the entry barriers and it will force companies with daily gold processing capacity of less than 50 tons to shut down. Citing unidentified sources who attended a national gold mining conference, the industry ministry is drawing up a blueprint to better regulate gold miners, such as shutting mines with a daily gold processing capacity of below 100 tonnes and halting approvals for small ore processing companies. China, the world's largest bullion producer, currently has no limits on gold production and production is determined by the gold producers.

Chinese energy giant China National Offshore Oil Corp (CNOOC) took over oil sands operator Opti Canada Inc. (TSXV:OPC) today in a deal valued at Cd$2.1 billion. This acquisition gives China's top offshore oil company its second stake in a Canadian oil sands property. With the close, reports Reuters, CNOOC gains a 35 percent stake in the troubled Long Lake oil sands project, which operates well below its 72,000 barrels per day capacity as operator Nexen Inc (NXY.TO) works to overcome problems with the C$6.1 billion project's reservoir.

“Chinese companies that are looking to invest in Canada do not want to become a Potash-like story themselves. Face and company reputation are important,” Peter Harder, president of the Canada-China Business Council told The Globe & Mail in an interview in Beijing this week as executives gathered for the council’s annual general meeting.

A joint venture between uber-miner Rio Tinto and Chinese partner Chinalco was finalized on Friday. The JV, called CRTX, has been officially registered and cleared to do business in China. The new company's priority will be exploring for copper, with plans to expand into coal and potash, Rio Tinto stated in a news release.

Reuters reports copper hit a one-month low on Wednesday, pressured by worries about the outlook for demand after factory growth in top consumer China slowed in November, a poor bond sale in Germany intensified concerns about the euro zone debt crisis and US efforts to tackle its budget continued to flounder. Three-month contracts for the red metal fell to a one-month low at $7,168 a tonne in intra-day trade in London and extended its losses in New York where it was trading at $3.27 a pound by early afternoon, its lowest level since October 25 and down 30% from its 2011 high of $4.61 set in February. Copper used in the power, telecoms and construction sectors is often seen as a barometer for economic growth, but a new research report suggests "Dr. Copper is Dead" and that the red metal, along with oil, have actually been lagging other economic indicators. In short: things may well be even worse than the fall in the copper price suggests.

Uncertainty regarding the never-ending euro crisis and weak data from China sent gold and markets lower. The S&P/TSX Composite Index is off 1.88% and the S&P/TSX Venture Composite Index is down 1.93%. Yesterday, gold broke through $1,700 mark but is now back trading at $1,680.

They were supposed to be the vessels that will ferry iron ore from the world's largest exporter to the world's largest customer of the crucial steelmaking ingredient. Instead, Vale's new fleet of iron ore carriers could remain moored at home docks because the Chinese don't want them. Bloomberg reports that the Vale Brasil, the largest bulk carrier ever built, was designed to carry iron ore to China from Vale's mines in South America, but it has not made one voyage in six months of operation. The reason? China is refusing to accept the vessel, which is part of a fleet of 19 ships that Vale is buying from Chinese and Korean shipbuilders in deals valued at $2.3 billion.