Supply scenarios

Afghan opium cultivation

Afghan opium cultivation has reached a record level, with more than 200,000 hectares planted with the poppy for the first time, the United Nations says. The [UN] report said the harvest was 36% up on last year … [as] more farmers have been trying to grow the (opium) poppy as the price of opium has been rising.

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Producing aluminium in Brazil

Producing aluminium in Brazil got so expensive as electricity prices surged to records this year that Alcoa Inc. (AA) idled its Pocos de Caldas smelter and now sells the facility’s power instead of metal. The worst drought in decades drained reservoirs used to run hydroelectric generators that supply power to extract aluminium, boosting costs already inflated by more spending on labor and transportation. [Shortages are now appearing for producers of drinks cans which rely on the aluminium.]

Iraq's Oil Output

Iraq has struggled to meet production targets over the last five years due to logistical and bureaucratic disruptions.

Last month's surprise jump in oil production came as a major bottleneck at Iraq's southern export terminal Basra was finally removed.

SINGAPORE/SHANGHAI, Sept 11 (Reuters)

A slide in iron ore prices to three-year lows is forcing many high-cost miners in China to curb output. Chinese [iron] ore has a lower iron content compared with many other countries so producers spend more to extract the mineral compared with global miners such as Vale, Rio Tinto and BHP Billiton. That means they feel the pinch sooner when prices fall.

State-run, mid-sized firm Minmetals Luzhong Mining has cut production to around 4,500 tonnes a day from around 5,000-6,000 tonnes, said a company official who declined to be named because he was not authorised to speak to media.