Latin Day Ahead: Metals ‘to Suffer’ as China Ends Stockpiling

Metal prices may decline as China begins to run down inventories, according to Francisco Blanch at Merrill Lynch & Co.; Crude oil fell below $69 a barrel in New York; Petroleo Brasileiro SA found evidence of oil in an onshore block in the country’s Espirito Santo Basin; The financial crisis reaches Chile’s Robinson Crusoe island as Spanish bankers give up lobster lunches.

TOP STORIES; MOST READ ON BLOOMBERG

Metals ‘to Suffer’ as China Ends Stockpiling Drive, Blanch Says

Metals prices may decline in the next three months as China, the world’s biggest user, begins to run down inventories that were built up earlier this year, according to Francisco Blanch at Merrill Lynch & Co.

Oil Falls Below $69 on Japan Exports Drop, U.S. Gasoline Supply

Crude oil fell below $69 a barrel in New York as Japanese exports dropped and an industry report showed an increase in U.S. gasoline inventories, raising concern the global recession will sap fuel demand.

Petrobras Finds Evidence of Oil in Onshore Espirito Santo Block

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, found evidence of oil in an onshore block in the country’s Espirito Santo Basin, the Brazilian petroleum regulator said.

Bankers Shunning Lobster Lunches Means ‘Crisis’ for Island

Ronaldo Contreras leaned over the side of his faded green fishing boat and hauled a wooden lobster crate from the Pacific Ocean off Robinson Crusoe Island, 420 miles west of the city of Valparaiso on Chile’s coast.

MAIN COMPANIES:

Brazil

Vale SA (VALE3) (VALE5 BS): The world’s biggest iron-ore producer doesn’t plan any company acquisitions in the short term as it wishes to first negotiate contract prices with steelmakers in China, Reuters said, citing an unidentified company source. Vale rose 0.9 percent to 30.19 reais.

Chile

Soc. de Inversiones Oro Blanco SA (OROB CC): Brokerage Larrain Vial SA will auction 3.35 billion shares in the investment company on the Santiago exchange at a minimum price of 7.92 pesos each. Oro Blanco fell 3.6 percent to 8 pesos.

Colombia

Ecopetrol SA (ECOPETL) : Colombia’s state-run oil producer may search for oil in the Gulf of Mexico near Cuba, Colombia’s Mining and Energy Ministry said. Ecopetrol Chief Executive Officer Javier Gutierrez and Mining and Energy Minister Hernan Martinez will discuss the possibility of exploring for reserves during a meeting with Cuban Energy Minister Yadira Garcia, the Colombian ministry said in an e-mailed statement. Ecopetrol rose 0.2 percent to 2,525 pesos.

Mexico

Grupo Mexico SAB (GMEXICOB) : Mexico’s largest mining company increased its offer for Asarco LLC, spokesman Juan Rebolledo said yesterday in a telephone interview. Grupo Mexico rose 0.8 percent to 13.97 pesos.

LATIN AMERICAN MARKETS:

Mexico: Consumer prices likely rose 0.16 percent during the first half of June, according to the median estimate in a Bloomberg News survey of 12 economists. The government reports the data at 10 a.m. New York time.

The peso slid 0.3 percent to 13.3521 per dollar.

The yield on the country’s 10 percent bond due December 2024 rose five basis points, or 0.05 percentage point, to 8.62 percent, according to Banco Santander SA.

Brazil: Inflation likely eased through mid-June with prices rising 0.33 percent on the month, from a 0.59 percent rise in mid-May, according to the median estimate in a Bloomberg News survey of 23 economists. The government reports the data at 8 a.m. New York time.

The real climbed 2.3 percent to 1.9864 per dollar.

The yield on the zero-coupon, real-denominated bonds due in January 2010 slid four basis points to 8.88 percent, according to Banco Votorantim.

Other prices in Latin American markets:

Argentina: The peso slid 0.3 percent to 3.7913 per dollar.

The yield on the country’s 5.83 percent peso bonds due in December 2033 slid 13 basis points to 16.32 percent, according to Citigroup Inc.’s local unit.

Chile: The peso slid 0.4 percent to 534.4 per dollar.

The yield for a basket of Chilean 10-year peso bonds in inflation-linked currency units, called unidades de fomento, was unchanged at 2.88 percent, according to Bloomberg composite prices.

Colombia: The peso slid 3.6 percent to 2,159.75 per dollar.

The yield on Colombia’s 11 percent bonds due in July 2020 rose 19 basis points to 9.54 percent.

Peru: The sol was little changed at 3.023 per dollar.

The yield on the country’s 8.6 percent bond maturing in August 2017 declined five basis points to 5.65 percent, according to Citigroup prices.

ECONOMIES: Brazil will publish IBGE consumer prices and its May current account and foreign direct investment; Mexico will release bi-weekly consumer prices and its unemployment rate; Argentina will announce May industrial production figures.

To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.