Clive Palmer, Australia’s fifth-richest man, bought the refinery for an undisclosed amount, Melbourne-based BHP said today in a statement. The refinery has a replacement value of A$2 billion ($1.6 billion), Palmer said in an e-mailed statement.

BHP closed the Ravensthorpe nickel mine in Western Australia in January, removing a main source of ore for Yabulu after nickel prices plunged. Global production of nickel, used to make stainless steel, may decline 12 percent from last year, Morgan Stanley said yesterday.

“BHP’s strategy is moving away from nickel,” said Michael McCormick, a fund manager at Belvedere Share Managers, which owns BHP stock. “BHP is getting so big that everything has to be of such a scale that they are probably thinking ‘We can’t move it and we’d rather concentrate on oil and iron ore’.”

BHP declined 2.5 percent to A$33.43 at the 4:10 p.m. Sydney time close on the Australian stock exchange. That compared with a 1.3 percent drop in the benchmark index.

BHP wrote down the carrying value of Yabulu by $500 million and also wrote off $175 million in unrecoverable tax benefits. Both writedowns will be recorded in the fiscal year ended June 30, 2009. The company said in November it would take a $2.1 billion one-time charge to write down the value of Ravensthorpe and Yabulu.

‘Core Business’

Palmer may have paid $100 million for the refinery, Citigroup Inc. said in a report today.

“This could flag BHP Billiton’s intention to eventually exit the nickel business,” Citigroup analyst Clarke Wilkins said. “We expect further scrutiny on whether the division remains a core business.”

Nickel, traded in London, plunged 56 percent last year as the global recession curbed demand.

“Despite nickel prices being down Yabulu is still profitable,” Palmer said in the e-mail. “This world-class plant is efficient and still has the opportunity to be expanded.”

BHP’s Australian nickel assets are “challenging” and the Yabulu refinery ranks in the third quartile on the cost curve, Goldman Sachs JBWere Pty said in February. BHP is scheduled to complete a review of Ravensthorpe’s future by the end of the year. It wrote down the value of the mine to zero in January.

Mine Restart

Palmer said today in an interview that he may be interested in buying Ravensthorpe if it was offered for sale. It may cost $250 million to restart the mine, he said.

“We would certainly want to study it and if it was, we would go ahead and put an offer in,” he said.

BHP is the world’s third-biggest nickel producer and has operations in Australia and Colombia. Its Nickel West unit, comprised of mines, concentrators, refineries and smelters in Western Australia, exports about 100,000 metric tons of nickel each year, according to BHP’s Web site.

Yabulu produces 35,000 tons of nickel and 2,500 tons of cobalt a year, worth A$600 million in export value, Palmer said. It sources ore from New Caledonia, Indonesia and the Philippines and has further production capacity of 40,000 tons of nickel and 700 tons of cobalt, Palmer said.

Palmer, chairman of coal and iron ore company Mineralogy Pty., was the only person in the top-10 of the BRW Magazine’s annual rich 200 list whose wealth increased last year. Palmer’s fortune more than doubled to A$3.4 billion ($2.7 billion) according to the list that was published in May.

Palmer, the second-largest shareholder in Gladstone Pacific Nickel Ltd., is buying Yabulu through three closely held companies: Nickel House Pty, Nickel Process Pty and Nickel Consolidated Pty.

Prices have climbed three-fold in certain cases since they reached the ebb of their trajectory in early 2009. Though there is no direct correlation between crude and base metals, the two have risen together in the recent past contributing to an upturn in the mining sector, which had for almost six months been used to positive news only from gold.

“We are seeing impressive bounces in metals. An increase in energy prices on account of bullish US inventory data and some steadiness shown in Asian equity markets are leading to buying in metals. Also helping is a report from China showing that manufacturing there expanded for the fourth month. It happened after the official purchasing manager index rose to a seasonally adjusted 53.1 in May to 53.2 in June. A reading above 50 indicates expansion,” said Edward Meir, a metals analyst at MF Global.

Steel industry insiders recently told Emirates Business that they expect both demand and prices of long and flat steel products to rise in the UAE. Prices had already improved from their depressive lows, they added.

What’s perhaps the most interesting thing is the time that metal prices have historically taken to emulate the post-recession green shoots.

Michael Widmer, the metal strategist with Bank of America Merrill Lynch (BoAML), said it typically takes six months for the first signals of an upturn post a recession to seep into metal prices.

“Predicting an exact timing for the end of the recession phase is difficult. Yet, there are indicators such as a rising ratio of new orders to inventories in many countries – metal consumption follows this ratio with a lag of about six months, which suggests that the demand backdrop for metals may normalise. By the fourth quarter of 2009, a reduction in inventories through the supply chain may be facilitated by improved shipments, with the stocking cycle likely entering recovery phase. In 2010, we expect global metal demand to start expanding again,” he wrote in his recent report.

However, in the immediate future, that is, in July, August and September metal prices could see further correction.

“Inventory adjustments continue to unfold and metal demand remains weak overall. This could be exacerbated through the summer months by the typical seasonal slowdown in industrial activity,” said Widmer.

“In China, we are concerned about the way the stocking cycle has played out year-to-date: on the copper market, for instance, there are indications that the booking of shipments was partially driven by an anticipation of a strong demand recovery, but imports seem to have exceeded actual offtake. This suggests that shipments especially of copper (but also those of other base metals) to China, which have supported LME prices so far in 2009, could soften over the summer months. Hence, we believe that a correction in base metal prices is possible in Q309,” he said.

There are signs that the fundamental backdrop may start to normalise, said the BofAML report.

“As to the nickel market, for instance, stainless steel inventories have been declining in many regions since the second half of 2007 to extremely low levels. This suggests limited scope for further large de-stocking, removing one bearish nickel demand driver. By 2010, we expect stainless steel orders to pick up, partially because of higher end-user demand, but also to replenish some of the depleted stocks. The global economy will likely to continue grow below potential, suggesting that metals consumption may not reach the levels seen earlier this decade but nickel prices are nevertheless set to recover,” said the report.
Meir said Nickel, which has already performed considerably well so far, will continue to fare well. “Nickel is at $1,569 (per metric tonne), up $255; a possible bearish double top formation is showing up on the charts,” he said, adding that in the short term, Nickel will face a support of $13,750 (per MT) and a resistance of $15,900.

As the economy starts to recover, shipments are rising, but firms are still cautious to boost output, which means that inventories and the inventory-to-shipment ratio continue to decline, said the BofML report. “In any case, cuts in industrial production subside, which tends to remove one bearish factor for base metal demand,” it noted.

Finally, as shipments would recover strongly, corporations will boost output, which may be accompanied by a pro-cyclical increase in inventories. “Along with an increase in industrial activity, metals’ demand is expanding at a rapid pace,” said the report. BofAML divided the entire decline and upturn in demand for metals into four cycles and emphasised that production would improve in the fourth cycle.

The metal industry is witnessing a reduction in inventory levels, said the report, citing two examples. “Stainless steel service centres have continued to reduce inventories. This trend started in 2007 when record nickel quotations pushed stainless steel prices up. Because the de-stocking in the stainless steel supply chain has started well before the current economic slowdown and as stocks are significantly lower than the levels seen only a few years ago, we believe that stainless steel and nickel demand may be among the biggest benefactors of an economic stabilisation,” said the report.

In the aluminium market, Alcoa President and CEO Klaus Kleinfeld said: “During the company’s first-quarter earnings conference call on April 7, 2009, the inventories that our supply chain is holding have been driven down to a level, which we believe is absolutely not sustainable. We’ve seen, for instance, US Metal Service Center year on year inventories decline by 24 per cent. We believe that that’s way beyond normal levels.”

Widmer expects the metal markets to ameliorate in the US. “We expect this to happen as we move into 2010 and metal demand is set to benefit. Metal consumption could be further boosted by a gradual improvement in the performance of the US economy through the next year, which should induce market participants and stainless steel distributors, to increase some of their metals-related inventories,” he said.

Japan’s export-oriented economy has been hit hard by the global economic slowdown, as demand for the country’s often base metal-intensive products, such as cars or electronics, evaporated almost overnight.

“Those production curtailments have been implemented was staggering, reflected in a 30.3 per cent yoy decline of industrial production in April, the largest drop among any of the developed countries in that month, helping to reduce stocks in many sectors. These measures had, not surprisingly, a substantial impact on Japan’s metal offtake with aluminium and copper demand dropping by 38.2 per cent yoy ytd and 48.9 per cent yoy ytd respectively,” said the report.

“We believe that Japan’s economic backdrop remains, overall, mixed. Yet, we note signs of normalisation in economic conditions. For instance, shipments in some metal-intensive sectors such as manufacturing have started to stabilise at low levels, suggesting that production cuts may have to do less work in the adjustment of inventories going forward,” it said.

While GDP in many of the traditional metal-consuming countries has fallen sharply, economic growth in China has remained remarkably steady. This was heavily influenced by an early implementation of the government’s fiscal stimulus package. Yet, the country was not able to completely immune itself from the global eonomic crisis.

“Not being insulated from the rest of the world, Chinese corporations have been reducing inventories through the economically turbulent months in the second half of 2008, reflected in a decline of the finished product stocks sub-index. While this sub- index continues to post relatively low values, we note that the headline PMI hit 53.1 in May. The combination of lower inventories and higher output suggests that sales must have been stronger, placing the Chinese economy in recovery phase,” said the report.

Since the country has single-handedly driven the metals markets, it’s important to discuss the demand for each metal in China.

Influenced by expectations over an economic upturn, there is a possibility that market participants may have imported copper in excess of what is required at this stage of the economic cycle.

The Chinese stockpiling had been cited as the prime reason behind the rally in copper prices. “Given the lack of domestic market tightness, imports may start to tail off, thereby removing the factor that has given substantial support to LME prices during the past few months. This is worrisome as metals’ demand in many countries is still weak,” said the report.

Analysts at MF Global said they expect the gold prices that currently stand at $5,069 a tonne will find a resistance at $5,388.
The picture is similar in the domestic aluminium market where re-stocking by the government provided significant support to domestic aluminium quotations, prompting a surge in imports that gave some support to the London Metal Exchange prices of late, BofAML’s commodities, said analysts.

“Influenced by the increase in aluminium quotations, there is strong evidence that domestic smelters have re-started production capacities, suggesting that the growth in shipments to China should start to subside,” it said.

After China’s stainless steel mills had shown production restraint, they have recently re-started capacities, incentivised in part by the effectiveness of the government’s stimulus package. This explains partially why nickel imports have risen.

However, China’s recent track record as an accumulator does dampen spirits.

“There are indications that domestic steel production is running ahead of demand, with anecdotal evidence suggesting that stainless stocks have been building. We also believe that some of the nickel shipped to China was in excess of actual usage. These considerations and evidence that domestic nickel production has restarted may dampen China’s purchasing activity and remove the immediate upward pressure from nickel prices in the coming weeks,” said BofAML analysts.

Some existing producers also have shut down or curtailed output at mines and plants and announcements continue to trickle through despite the recent metals price rises.

Below are details of major projects and facilities affected in recent months, as well as other related news.

July 3 - BHP Billiton retreated further from high-cost nickel operations, announcing the sale of its Yabulu refinery in Australia.

July 2 - The Philippines’ Samirara Mining Corp said its 50-percent held unit has suspended operations a nickel project north of Manila due to low prices.

June 25 - Russia’s UC RUSAL plans to reduce output at its Guinea alumina plant by more than 50 percent from July 1. Plans to return to normal production levels in August.

June 18 - HudBay Minerals said it would close its ageing Flin Flon, Manitoba copper smelter before July 2010 and its White Pine, Michigan refinery shortly thereafter, citing the deteriorating economics of the operations.

June 16 - Mirabela Nickel Ltd said a delay in financing had impacted delivery of equipment. First concentrate at Brazilian mine is now expected in September.

June 12 - Ormet Corp said it had cut production capacity to five potlines from six as of May 20 at its Hannibal primary aluminium smelter in Ohio after trimming output to 5-1/2 potlines on May 1. Cites lack of alumina.

June 10 - Kazakhstan’sKazakhmys said it had suspended zinc output at its Balkhash plant.

June 9 - The Philippines has slashed its investment target for the mining sector this year to just over $600 million from an earlier goal of up to $1 billion.

June 5 - Glencore said it had placed its 80,000 tonnes per year (tpy) lead production line at Portovesme in Sardinia on temporary care and maintenance.

June 2 - Century Aluminum said it had delayed repairing damaged pots at its Hawesville, Kentucky primary aluminium smelter.

June 2 - Doe Run Peru said it would halt all operations at its La Oroya polymetallic smelter because financial and environmental setbacks had prevented it from buying concentrates.

May 26 - PT International Nickel Indonesia revised down its capital expenditure budget for this year by more than a quarter.

May 20 - Alcoa Inc reduced primary aluminium production at its three smelters in Spain by some 18 percent in line with global cutbacks announced already by the company.

May 13 - Denison Mines Corp said development of the Midwest uranium project had been postponed.

May 12 - BHP Billiton said planned to stop mining at the Rocky’s Reward open-pit mine at the Leinster Nickel Operation in Australia.

May 11 - Aluminium Bahrain (Alba) said it had put plans to boost its production capacity to 1.2 million tonnes per year on hold.

May 11 - The future of an aluminium smelter project at Saudi Arabia’s King Abdullah Economic City is ‘uncertain’, an executive of state-owned smelter Dubai Aluminium Co (Dubal) said.

May 10 - Oman’s Sohar Aluminium, part-owned by Rio Tinto , said it had put the second phase of its plant on hold.

May 8 - PT International Nickel Indonesia asked the government for more time to assess plans for a new 20,000-30,000 tonnes per year (tpy) plant after a study showed the project may not be feasible.

May 7 - Breakwater Resources said if base metals prices returned to late 2008/early 2009 lows they may cut mill throughput and mine only gold-bearing deposits for the rest of 2009 at Toqui zinc-lead-gold mine in Chile.

May 6 - Noranda Aluminum Holding Corporation said annual production rate of smelter-grade alumina at Gramercy refinery in the United States halved to 500,000 tonnes per year (tpy). It continues to evaluate options to cut purchase cost of alumina, including assessing the curtailment of Gramercy.

May 5 - Suriname Aluminium Company LLD (Suralco) said it would cut about 40 percent, or 870,000 tonnes per year (tpy) of production at its Paranam alumina refinery. Suralco is part of the Alcoa World Alumina and Chemicals group.

April 30 - Hydro Aluminium, the German unit of Norway’s Norsk Hydro said it may stop production at its loss-making aluminium smelter at Neuss in Germany in June.

April 30 - Eramet’s said nickel output would continue to be adjusted in relation to the market surplus and low prices. Also said it would continue to limit capital expenditure.

April 30 - Kazakhmys posted a 20 percent fall in Q1 copper cathode output from the previous quarter as part of stated move to cut production. Said it suspended output at sections of a fifth mine in addition to four mines previously announced.

April 29 - Alcoa Inc said to cut aluminium production at Portland smelter in Australia by a further 38,000 tonnes to 305,000 tonnes per year.

April 29 - Belgium’s Nyrstar said its zinc output dropped by 30 percent in Q1 2009 from Q4 2008. It said it planned to transform cost structure across the company, resulting in over 50 million euros ($65.1 million) in cost savings per year from 2010.

April 28 - Russia’s Chelyabinsk Zinc Plant said it produced 36.7 percent less zinc and zinc-based alloy in Q1 2009 than in the same period last year. Production cuts part of company’s cost-cutting measures.

April 24 - Century Aluminum said it may cut its smelter output further. One official said it may soon decide to close another potline at its Hawesville, Kentucky smelter.

April 24 - BHP Billiton said the viability of its Bayside aluminium smelter in South Africa was at risk following a sharp fall in demand for value-added products.

April 23 - Mexico’s mining chamber said it saw new investments in exploration and expansion projects in the country dropping by 25 percent this year from last year to $2.73 billion.

April 23 - Southern Copper said it had further trimmed its 2009 capital and exploration budget to $328 million from $415.3 million.

April 22 - Freeport-McMoRan Copper & Gold Inc said its spending plans continue to be reviewed and may be revised based on market conditions.

April 22 - BHP Billiton said output from its Escondida copper mine in Chile will fall by 30 percent this fiscal year. Said all its operations would remain under review.

April 22 - Indonesian state-owned miner, PT Aneka Tambang Tbk, said its first-quarter ferro-nickel output fell 24 percent from a year ago on slowing demand.

April 22 - Indonesian tin production may not reach 90,000 tonnes this year as production adjusts to slowing demand, a director general at the country’s energy ministry said. He said Indonesia had initially planned to limit output to 105,000 tonnes.

April 21 - China’s Yunnan Copper Co Ltd said its production in the first quarter fell 34 percent from a year earlier due to the global financial crisis.

April 21 - Russia’s United Company RUSAL said it was halfway towards its goal of cutting costs by $1.1 billion in 2009 after reducing them by $554 million in the first quarter. Aluminium production fell 7.2 percent year-on-year in the first quarter. Plans to cut 2009 output by 500,000 tonnes.

April 21 - Noranda Income Fund said May output of zinc and sulphuric acid would be reduced by about 20 percent.

April 17 - FNX Mining said it was considering suspending its remaining production in Sudbury, Ontario due to Vale Inco’s decision to temporarily shut down its operations there.

April 16 - Vale said it would delay the start-up of its Onca Puma nickel project in Brazil by at least one year. Previously expected to come on line in January 2010. Company also said it would shut its Sudbury nickel mines and processing plants in Ontario, Canada for eight weeks from June 1.

April 14 - Indonesia’s PT Timah Tbk said it expected to cut its refined tin output by as much as 8 percent this year.

April 13 - Anvil Mining said budgeted capital expenditure for 2009 had been cut to the minimum necessary to sustain the operation of the Kinsevere HMS plant.

April 10 - Zambia’s Luanshya Copper Mines (LCM) would delay to June a resumption in its operations after some creditors refused to accept only half of the money they were owed by the mine owners, a government minister said.

April 9 - Russia’s UC RUSAL said it would cut output at its Novokuznetsk smelter from mid-April by a third from 317,000 tonnes produced in 2008.

April 9 - Xstrata Plc said it planned to suspend operations at its Sinclair nickel mine in Australia in August if metals prices did not rebound.

April 9 - Vedanta said it shut down a part of the BALCO Plant I smelter in India in Q4 due to higher operational costs.

April 8 - Greece’s Larco said it would cut nickel in ferro-nickel output to between 10,000-12,000 tonnes this year from about 18,500 last year.

April 7 - Alcoa expects its Q2 alumina output to decline slightly to match smelter demand. Company projects weak global demand and expects another 1.4 million tonnes of primary aluminium output cuts in coming months.

April 7 - Rio Tinto said it would cut bauxite production at its Weipa mine in northeastern Australia by about 23 percent. It also said it would slow the expansion of the Yarwun alumina refinery in Queensland.

April 7 - Tajikistan cut aluminium output by 16.8 percent year-on-year in Q1 2009, a source at state-owned TALCO aluminium company said. Tajikistan has said it plans to produce 377,000 tonnes this year, down from 399,450 tonnes in 2008.

April 2 - Alcoa Inc said it would curtail about 120,000 tonnes per year (tpy) of aluminium smelter output at its Massena, New York operations in May, raising total cuts to the firm’s production to over 850,000 tonnes, or 20 percent of annualised output.

April 2 - Most of Japan’s refined lead and zinc producers plan to reduce output in the first half of the year to end-March 2010.

April 1 - Bosnia’s sole alumina plant Birac said its 2009 output would fall almost two thirds to 120,000 tonnes of alumina because of the economic crisis.

April 1 - Montenegro’s loss-making KAP aluminium smelter will temporarily suspend 20 percent of its workforce.

April 1 - Jamaica-based West Indies Alumina Co, whose majority shareholder is Russia’s United Company RUSAL, suspended bauxite mining as part of a plan to temporarily shutter the company’s operations.

April 1 - United Company RUSAL and Russian hydro-electricity giant RusHydro said they had agreed to postpone launching the Boguchany aluminium smelter project for two years to 2012. But on April 16 UC RUSAL proposed reversing earlier decisions to postpone the Boguchany and Taishet smelter projects to provide an outlet for a major hydro power station.

April 1 - Japan’s copper smelters plan to keep output either flat or lower in the first half of the business year.

March 31 - Glencore said it had suspended operations at its Iscaycruz lead-zinc mine in Peru.

March 29 - Two Chinese aluminium producers, Shengxin Aluminium and Shanghai Unison Aluminium, have halved their output, executives said.

March 27 - Sweden’s Boliden said it was maintaining cutbacks announced in late January. At that time the company said it would reduce output by about 68,000 tonnes on an annualised basis in the first quarter of 2009.

March 26 - Norway’s Norsk Hydro said it would cut metal output at its Sunndal smelter in Norway by 100,000 tonnes, bringing total curtailments to half a million tonnes.

March 26 - Metallica Minerals deferred feasibility work indefinitely on its 8,000 tonnes per year (tpy) Nornico mine project in Queensland, Australia.

March 26 - A $500 million nickel pig iron project planned for Indonesia had been scrapped, Shanghai Tshingshan Mineral Company Ltd, the majority partner in the venture, said.

March 26 - Doe Run Peru halted work at 95 percent of its La Oroya poly-metallic smelter because of financial trouble. On April 2, the company said it would restart work as soon as possible afer reaching a new credit deal.

March 25 - Russia’s UC RUSAL may widen output cuts to up to 20 percent and is taking steps to cut costs as it faces peak debt repayment of $8 billion this year, the firm and analysts said.

March 25 - UC RUSAL said it would halve aluminium output at its loss-making ZALK unit in Ukraine this year due to high energy costs, as part of plans to slash 11 percent of total annual output. Alumina output will also be cut.

March 25 - Eurasian Natural Resources Corporation said it would maintain output cuts since a recovery was unlikely until 2010. Also said it had cut its long-term capex expansion programme to $2.4 billion from $6.9 billion.

March 23 - Yamana Gold’s Argentinian unit, which has been working on the Agua Rica copper-gold project, last week said it would temporarily slow work on the project. Mine close to final approval, but company undecided on how it will proceed with plans for the property.

March 23 - India’s state-run National Aluminium Co plans to lower output if inventory levels keep rising, the Business Standard newspaper reported.

March 20 - U.S. copper miner Asarco LLC shut its rod and cake plants in Amarillo, Texas and is planning periodic slowdowns at the copper refinery beginning March 22.

March 20 - South African ferrochrome producer Hernic said it shut all its four furnaces at the start of this year.

March 20 - Geovic Mining Corp. said it would slash costs, reduce in scale and delay by at least a year its Nkamouna cobalt-nickel-manganese project in Cameroon.

March 19 - European Goldfields said further ramp up of output at its Stratoni lead-zinc mine in Greece would be delayed.

March 19 - Uranium miner Denison Mines will temporarily suspend production at its Sunday and Rim mines in the western United States and will likely shut its White Mesa mill in May.

source : forbes.com

The benchmark FTSE 100 Index added 91.50, or 2.2 percent, to 4,340.71, the biggest gain in six weeks, after closing out the steepest quarterly rally since 2003 yesterday. The FTSE All- Share Index climbed 2 percent.

The FTSE 100, the worst performing gauge among the 23 developed markets tracked by Bloomberg this year, still advanced 8.2 percent in the second quarter on optimism the worst of the recession is over. The rebound left the measure trading at 33.8 times the earnings of its companies, close to the highest level since 2003, according to Bloomberg data.

“A lot of new money is coming into the market for the new quarter,” said Tony Betts, a sales trader at CMC Markets in London.

A U.K. index of manufacturing rose more than economists forecast in June to show the smallest contraction in more than a year, evidence that the recession is easing.

Retailers Rally

Marks & Spencer, the U.K.’s largest clothing retailer, jumped 3.8 percent to 317.5 pence. Revenue at U.K. stores open at least a year fell 1.4 percent in the 13 weeks ended June 27. That beat the 2.5 percent decline estimated by 16 analysts surveyed by the company.

Next Plc, the second-biggest clothing retailer, added 3.9 percent to 1,526 pence. Tesco Plc, Britain’s largest retailer, gained 1.8 to 360.1 pence.

BHP Billiton climbed 4.5 percent to 1,425 pence. Vedanta, the biggest copper producer in India, advanced 9.9 percent to 1,415 pence.

Copper extended its best first half in three years as manufacturing expanded in China, the world’s largest user of the metal. Lead, nickel, tin and zinc also increased.

Tate & Lyle Plc, Man Group Plc and Burberry Group Plc were among companies that traded without the right to the latest dividend.

The following shares rose or fell. Stock symbols are in parentheses.

Anite Group Plc (AIE LN) slid 12 percent to 31 pence, its biggest decline since November 2007. The U.K. producer of mobile-phone software expects profit for 2009 to 2010 to be lower than a year earlier as it invests in developing fourth- generation mobile phone software for devices such as smart phones.

National Express Group Plc (NEX LN) fell 8.2 percent to 284 pence, its biggest drop since May. Britain’s biggest long- distance coach operator said Chief Executive Officer Richard Bowker will step down while the U.K. withdrew the company’s unprofitable East Coast rail franchise.

The MSCI World lost 0.1 percent to 946.80 at 4:35 p.m. in New York as 12 stocks fell for every seven that rose. The gauge of 1,654 companies in 23 developed nations slipped 1.8 percent this week as the U.S. lost more jobs than projected.

“People realize the economy isn’t as bright as expected,” said Franz Wenzel, deputy director of investment strategy at Axa Investment Managers in Paris, which oversees $678 billion. “Over the next couple of weeks or even months, the stock market will trade sideways at best.”

Europe’s Dow Jones Stoxx 600 Index fell less than 0.1 percent as eight stocks declined for every five that advanced. The measure has slipped 5 percent since June 11 on speculation share prices have outpaced the outlook for economic growth after a three-month rally pushed valuations to 25.6 times earnings, the highest level since 2004.

Asia, Canada

The MSCI Asia Pacific Index declined 0.2 percent, leaving it with a drop of 0.8 percent since June 26. The Standard & Poor’s 500 Index tumbled 2.5 percent this week. The U.S. was closed today for Independence Day.

Canada’s S&P/TSX Composite Index climbed 0.4 percent as raw-material producers advanced, trimming its weekly drop to 1 percent.

The dollar posted a weekly gain against the euro as speculation the economic recovery is faltering boosted demand for the safety of the U.S. currency. The pound fell against the dollar, declining for the first week in a month, after a report showed the U.K.’s service industries were little changed in June as the recession persisted.

The U.S. Treasury market was closed for the holiday. Copper for three-month delivery fell for a second day on the London Metal Exchange, sliding 1.1 percent to $4,980 a metric ton.

Retail Sales

Metro declined 2.5 percent to 34.83 euros. Retail sales in the 16-nation euro region declined 0.4 percent in May from April, when they rose 0.1 percent, less than initially reported, the European Union’s statistics office in Luxembourg said today. Economists expected a drop of 0.1 percent, according to the median of 20 forecasts in a Bloomberg News survey.

Europe’s service industry contracted at a faster pace in June as rising unemployment damped consumer spending. A gauge of services activity fell to 44.7 from a seven-month high of 44.8 in May, London-based Markit Economics said.

Seven & I plunged 5 percent to 2,190 yen. The retailer said yesterday profit dropped 28 percent in the three months ended May 31 as deteriorating household incomes prompted consumers to save money. Isetan Mitsukoshi Holdings Ltd., Japan’s largest department-store operator, slumped 4.9 percent to 950 yen.

France Telecom SA slipped 1.1 percent to 16.23 euros as Europe’s third-biggest phone company was cut to “sell” from “neutral” at UBS AG.

Nuclear Power

Electricite de France SA, Europe’s biggest power producer, lost 4.5 percent to 31.97 euros. Morgan Stanley cut its recommendation to “equal weight” from “overweight.”

Separately, the London-based Times reported that EDF is importing power from the U.K. because a summer heatwave has put a third of its nuclear power stations out of action. EDF also started a 110 billion yen ($1.2 billion) sale of samurai bonds, the first such securities from a non-financial borrower since Lehman Brothers Holdings Inc.’s September collapse.

Banco Espirito Santo SA climbed 5.4 percent to 4.10 euros. Portugal’s biggest publicly traded bank by market value said that earnings in the second quarter should be “stronger” than in the first three months of the year.

Deutsche Bank AG, Germany’s biggest bank, added 1.7 percent to 42.70 euros. Commerzbank AG, the second-largest, advanced 2.9 percent to 5.06 euros.

German lawmakers backed Finance Minister Peer Steinbrueck’s plan to purge state and private banks of toxic assets, more than nine months after the global financial crisis brought the banking system to its knees. Lawmakers in the lower house of parliament in Berlin voted in favor of the bill today. It will now go to the upper house on July 10.

‘Toxic Assets’

The German plan “is helping financial shares,” said Arnaud Scarpaci, a fund manager at Agilis Gestion in Paris, which oversees $140 million. “We’ve been waiting for this. There will be less uncertainty regarding toxic assets.”

Teck Resources rose 8.1 percent to C$19.99 in Toronto. Canada’s largest diversified mining company sold a 17 percent stake to China’s $200 billion fund sovereign wealth fund for C$1.74 billion ($1.5 billion) to cut debt.

Cemex SAB, the largest cement producer in the Americas, slid 3.6 percent to 11.55 pesos. Strabag SE, central Europe’s biggest construction company, withdrew from buying Cemex assets in Austria and Hungary after failing to gain Austrian antitrust approval. Strabag slipped 0.3 percent to 15.22 euros.

Emerging markets’ share of the world’s equity value climbed to a record as the fastest-growing economies lured investors amid the global contraction. The 22 nations classified as “emerging” by MSCI Inc. comprise 24 percent of global market capitalization, up from 18 percent at the start of this year, the highest since Bloomberg began compiling the data in 2003.

Earnings Season

The second-quarter U.S. earnings season will kick off next week with Alcoa Inc., the largest U.S. aluminum producer, reporting on July 8. Analysts estimate profits in the S&P 500 declined 34 percent in the second quarter and will slump 21 percent on average in the third before rebounding 61 percent in the final three months of the year, according to Bloomberg data.

Investors will monitor the Treasury’s auctions next week to see if demand holds up as U.S. President Barack Obama pushes the nation’s marketable debt to an unprecedented $6.45 trillion. The Treasury will hold four auctions next week for the first time to sell $73 billion of notes, bonds and inflation-protected securities as the U.S. accelerates debt sales to finance a record budget deficit.

“Sentiment is still on the weak side, fearing that Chinese imports are going to ease off in the coming months,” Stephen Briggs, an analyst at RBS Global Banking & Markets in London, said by phone. “We see this as a correction in a bull market.”

Copper for delivery in three months traded $40, or 0.8 percent, lower at $5,015 a metric ton as of 2 p.m. on the LME. Copper futures for September rose 0.1 percent to $2.2835 a pound on the Comex division of the New York Mercantile Exchange.

Prices may also decline after the Labor Department in Washington said the number of Americans filing claims for unemployment benefits unexpectedly rose last week and the total number receiving payments increased.

“The jobless figures were bearish and suggests the recovery could be slower that what some metal bulls might have priced in,” David Thurtell, an analyst at Citigroup Inc. in London, said by phone.

Among other LME metals for three-month delivery, aluminum fell 0.8 percent to $1,646 a ton. Prices reached their low for the year on Feb. 24, trading at $1,279.

“We continue to believe aluminum prices bottomed in February and are headed toward $1,800-2,000 per ton before the end of the year and as soon as September,” Laredo, Texas-based researcher HARBOR Intelligence said in a report yesterday.

Nickel fell 0.5 percent to $15,430 a ton. Lead rose 0.2 percent to $1,708 a ton, while zinc declined 0.4 percent to $1,605 a ton and tin retreated 0.1 percent to $14,730 a ton.

On the London Metal Exchange copper for three-month delivery rose by 5 dollar to 5,135 dollar a metric tonne.

In the national capital, copper wire scrap, copper super d rod, copper wire bar and copper mixed scrap were up by Rs 2 each to Rs 277, Rs 299, Rs 300 and Rs 255 per kg respectively.

Nickel (4×4) also gained Rs 2 at Rs 688-850 per kg.

Following were Friday’s quotations Rs per kg:

Tin ingot 715, zinc ingot 101.00, nickel plate (4×4) 688-850, gun metal scrap 225 bell metal scrap 230, copper wire scrap 277.00, copper super D rod 299.00, copper wire bar 300, copper mixed scrap 255.00, Utensil scrap 219, Chadripital 170.

Lead ingot 92, lead imported 107, aluminium ingots 104, sheet cutting 100, aluminium wire scrap 100 and aluminium utensils scrap 90.

Toronto Stock Exchange (10,287.95 up 166.45 points):

Great Basin Gold Ltd. (TSX:GBG). Miner. Down 10 cents, or 5.52 per cent, to $1.71 on 18,403,392 shares. The gold sector on the TSX led all advancers, gaining 3.85 per cent.

Centamin Egypt Ltd. (TSX:CEE). Miner. Up 30 cents, or 21.43 per cent, to $1.70 on 14,366,269 shares. Shares closed at a historical high on rumours that the company, based in Perth, Australia, is set to be taken over by either the world’s biggest gold producer, Barrick Gold (TSX:ABX) or the second-largest gold company, Newmont Mining Corp. (TSX:NEM).

Yamana Gold (TSX:YRI). Miner. Up 23 cents, or 2.28 per cent, to $10.30 on 10,979,583 shares. The metals and mining sector was one of the leading gainers, up 3.83 per cent.

Bombardier (TSX:BBD.B). Transportation. Down two cents, or 0.59 per cent, to $3.35 on 10,780,972 shares.

Lundin Mining Corp. (TSX:LUN). Miner. Up 17 cents, or 5.43 per cent, to $3.30 on 9,513,227 shares.

Manulife Financial Corp. (TSX:MFC). Insurer. Up 20 cents, or 0.87 per cent, to $23.25 on 9,115,518 shares.

TSX Venture Exchange (1,118.80 up 4.49 points):

Gold Wheaton Gold Corp. (TSXV:GLW). Miner. Down 1.5 cents, or 5.26 per cent, to 27 cents on 8,168,250 shares.

Q-Gold Resources Ltd. (TSXV:QAU). Miner. Up half a cent, or 14.29 per cent, to four cents on 6,735,670 shares.

Companies reporting major news:

Canadian Superior Energy Inc. (TSX:SNG). Natural gas. Unchanged at 82 cents on 132,920 shares after saying it is buying Challenger Energy Corp. (TSX:CHQ), one of its partners in a major offshore natural gas field in the Caribbean, in a deal valued at $77.8 million.

HudBay Minerals Inc. (TSX:HBM). Miner. Up 20 cents, or 2.55 per cent, to $8.04 on 2,128,526 shares after the company said it will aggressively pursue development of the Lalor zinc deposit in northern Manitoba while exploring global acquisition opportunities under its new strategic plan.

Mega Brands (TSX:MB). Toy maker. Up three cents, or 5.36 per cent, to 59 cents on 460,522 shares. The struggling company, which has been dealing with recalls and other problems, will look to its new toy Battle Strikers to help spin a corporate recovery at the Montreal company.

The benchmark FTSE 100 Index climbed 65.07, or 1.5 percent, to 4,345.93 in London, paring the loss for the week to 2.2 percent. The FTSE All-Share Index added 1.5 percent today, while Ireland’s ISEQ Index gained 1.5 percent.

Markets were more volatile than usual today as options on equity indexes, including the FTSE 100, and some individual stocks expired.

The FTSE 100, which this week dropped below its 200-day moving average for the first time since May, has rebounded 24 percent from the year’s low on March 3. The measure last week traded at 30.9 times the earnings of its companies, the most expensive in five years, according to Bloomberg data.

“Miners have been beaten down so they are getting the major benefit in a rebound,” said London-based David Morrison, a market strategist at GFT. “The FTSE 100 is hovering around a major support level. Traders will have the next resistance level of 4,500 back in their sights.”

The European Union is heading for a “sustainable economic recovery” and must prepare to rein in budget deficits after the region emerges from recession, EU leaders said in the draft of a statement to be approved today.

Xstrata Gains

Xstrata, the world’s fourth-largest copper producer, gained 4.1 percent to 681 pence. The Financial Times, citing a person close to the situation, reported Glencore, the world’s biggest commodities trader, is reviewing its partnership structure and is considering an IPO.

The company has held initial talks with bankers about a share sale, although an offering isn’t considered imminent, the FT reported. Spokesman Marc Ocskay declined to comment on the report.

Lonmin Plc, the world’s third-biggest platinum producer, added 5.6 percent to 1,250 pence, leading a measure of mining shares higher. Vedanta Resources Plc added 2.8 percent to 1,422 pence.

The FTSE 350 Mining Index rose 2.6 percent, rebounding from its longest losing streak since January.

Buyers Return

Taylor Wimpey increased 9.7 percent to 34 pence. The U.K.’s largest homebuilder said its British order book surged 73 percent from the end of last year as buyers returned to the housing market and prices stabilized.

The company has lowered its net debt to 1.01 billion pounds as of June 17 from 1.59 billion pounds and said it expects to reduce its debt level further by the end of this year.

BSkyB rallied 3 percent to 443.75 pence. UBS upgraded the U.K.’s biggest pay-television provider to “buy” from “neutral,” saying “regulatory fears” had created a buying opportunity.

The following stocks also gained or fell in the U.K. market. Stock symbols are in parentheses.

Candover Investments Plc (CDI LN) gained 31 pence, or 12 percent, to 300 after agreeing to sell Wood Mackenzie Consultants Ltd. to leveraged buyout fund Charterhouse Capital Partners LLP, raising about 36.2 million pounds in cash for the private equity fund.

Carnival Corp. (CCL LN) rallied 97 pence, or 6.2 percent, to 1,668, extending yesterday’s 7.2 percent advance after the biggest cruise-line operator reported second-quarter profit that beat analysts’ estimates. Wachovia Corp. raised its recommendation for the U.S.-traded shares to “outperform.”

Carphone Warehouse Group Plc (CPW LN) increased 9.25 pence, or 6 percent, to 162.5. Royal Bank of Scotland Group Plc upgraded Europe’s largest mobile-phone and laptop retailer to “buy” from “hold” and raised its share price estimate to 230 pence.

International Power Plc (IPR LN), the British utility that produces electricity in 20 countries, gained 6 pence, or 2.5 percent, to 242. UBS upgraded European utilities stocks to “overweight,” saying dividend yield across the industry are “attractive relative to bonds, the equity market and other sectors.”

“It must be the trade in commodities, since we’ve been getting lots of positive news recently on steel,” said analyst Charles Bradford of Affiliated Research Group.

In London, copper hit a near two-week low as doubts about the global economic recovery renewed worries over metals demand. Benchmark copper MCU3 was selling for $4,900 a tonne, down from Tuesday’s close of $4,980. Aluminum MAL3 traded at $1,590 a tonne from $1,610.

Oil meanwhile fell below $70 a barrel on Wednesday.

In morning trading on the New York Stock Exchange, aluminum producer Alcoa Inc’s (AA.N) stock was down 4.9 percent at $10.36 and copper miner Freeport-McMoRan Copper & Gold (FCX.N) slid 5.6 percent to $49.42.

Steelmaker ArcelorMittal (MT.N) (ISPA.AS) fell 5.3 percent to $30.49, AK Steel (AKS.N) was down 5 percent at $17.42. U.S. Steel (X.N) fell 3.5 percent to $35.40 and Nucor (NUE.N) was down 2.3 percent at $45.77.

The Dow Jones steel index .DJUSST was down 3.5 percent.

Coal company stocks fell too, as the oil price slipped. Massey Energy (MEE.N) fell 6.4 percent to $19.88, Peabody Energy (BTU.N) was down 5.9 percent at $30.30, Arch Coal (ACI.N) was 4.7 percent lower at $15.82 and Consol Energy (CNX.N) slipped 4.5 percent to $35.73.