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VRS - who has written 37015 posts on Opalesque Commodities Briefing.


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Chinese Investors Look for Rare Earth Metals in Greece

Posted on 15 September 2014

The Greek subsoil and its rare earth metals have attracted the interest of Chinese investors. On the occasion of the ERES international conference hosted in Greece from September 4 to 7, a delegation from China, which is considered the absolute leader in the earth metals field, visited Greece.

Zinc: World running out and shortage hits pound in your pocket

Posted on 15 September 2014

Prices for the rust-resistant metal zinc soared to a three-year high last week as exhausted mines across the world close, but it is with the pound in our pocket that we are likely to feel the soaring cost most acutely. One and two-pound coins are made up of as much as 25 per cent zinc and analysts are predicting the Royal Mint may have to follow the example of the US Mint and take cost-cutting measures.

Industrial Metals Fall After China Data Signals Slowing Economy

Posted on 15 September 2014

Copper lead most industrial metals lower after factory and retail-sales data signaled further slowing in China, the world’s biggest user. Copper in London fell as much as 0.8 percent, while zinc and lead also declined. Industrial-output growth in China was the weakest in August since the global financial crisis while investment and retail sales moderated, figures released Sept. 13 showed.

Commodity ETFs Are Dying And That’s A Good Thing

Posted on 15 September 2014

One of the points I stress in my book is how commodities are not really a wise asset class to allocate assets to for long periods of time. History has shown us that commodities generate poor real, real returns over the long-term. But we don’t have only history on our side. It makes perfect sense that commodities aren’t good long-term performers because they’re huge cost inputs in the capital structure. So they tend to have a very high correlation with inflation.

Will 2014 Be The Tipping Point For Active ETFs?

Posted on 15 September 2014

The pace of new actively managed ETFs being released to the market has continued to heat up this year. Of the 106 total ETFs that are designated as active by the SEC, 35 have been released this year and many more are planned in the near future.

Tokyo Commodity hopes cut costs with Osaka Exchange

Posted on 15 September 2014

The Tokyo Commodity Exchange is considering sharing a new system with the Osaka Exchange, a unit of Japan Exchange Group Inc., it has been learned. The Tokyo exchange hopes the move will help reduce costs as it faces the need to save system expenses and overcome its business difficulties caused by a slump in trading volume, sources said. It is expected to switch to the new system in autumn 2016.

Currency question at heart of Scottish debate

Posted on 15 September 2014

In for a penny, in for a pound. There will be no going back if Scotland votes for independence from the United Kingdom on September 18. Opinion polls showing this may happen have prompted investors to sell off the British pound. If a knockout blow is dealt to Scotland’s 307-year union with England, that selling could accelerate as the UK plunges into a constitutional crisis.

China’s Environmental Awakening

Posted on 15 September 2014

China today — as it begins to come to terms with air, water and land befouled by three decades of industrialization — bears some resemblance to the United States of the late 1960s. The Chinese are beginning to wonder, just as Americans did back then, whether “industrial progress” has come at too high a cost to the environment. Attitudes in China are changing.

China plans $65bn carbon market – at around $18/tonne

Posted on 15 September 2014

Just two months after Australia trashed its carbon price because it was “too high” and would “trash the economy”, China has flagged that its planned carbon trading scheme will cover 40 per cent of its economy and be worth up to $65 billion.

How poor countries seemed to be catching up with rich ones

Posted on 15 September 2014

If the 20th century belonged to the rich countries of North America and Europe, the thinking among some economists goes, then the 21st will be the era of the emerging world. Economic growth across emerging markets has been scorching since 2000. Some of the largest countries, like India and China, managed growth rates above 10% per year. Continued growth at such rates would mean a process of “convergence” with the rich world.

Commodities Fall to 5-Year Low With Plenty of Supplies

Posted on 12 September 2014

Commodities fell to a five-year low on speculation abundant supplies and slowing economic growth outside of the U.S. will curb demand for raw materials. The Bloomberg Commodity Index declined to the lowest since July 2009. Brent oil traded at the cheapest since 2012, wheat, corn and soybeans retreated to four-year lows, and gold slumped to a seven-month low.

Commodity prices slip on waning global appetite

Posted on 12 September 2014

Commodity prices are falling, the second time around in 2014. In the current quarter, till date, the Thomson Reuters CRB Commodity Index, a broad indicator, has declined by 7.7%. A similar indicator, the S&P GSCI Index, has fallen by 10.4%. What has contributed to this fall? Food prices are a reason. On Thursday, the UN’s Food and Agriculture Organization said its food price index fell to 196.6 points in August, a level last seen in September 2010.

Commodity price slump is a matter of perspective

Posted on 12 September 2014

Commodity prices may have come under pressure this year, but they are still 115 per cent above their 1990s average, with iron ore and oil up over 500 per cent, according to a long-term analysis of commodity prices by HSBC.

IEA Cuts 2015 Oil Demand Forecasts

Posted on 12 September 2014

The International Energy Agency Thursday trimmed its forecast for the rise in oil demand this year for the third month in a row, calling the recent slowdown in demand “nothing short of remarkable.” In its closely watched monthly oil market report, the Paris-based energy watchdog said it expects global oil demand to grow by 0.9 million barrels a day in 2014, a decrease of 65,000 barrels a day compared with last month’s forecast and down by 300,000 barrels a day since July.

IEA Cuts Demand Estimate as Saudi Exports Drop to 2011 Low

Posted on 12 September 2014

The International Energy Agency cut its global oil demand forecasts for 2015 and said Saudi Arabia exported the least in almost three years as purchases slowed from China and Europe.

Oil slumps to two-year low on IEA demand downgrade

Posted on 12 September 2014

Global oil prices hit a two-year low today after the International Energy Agency cut its forecasts for world demand, with the market also weighed down by plentiful supplies, analysts said.

No need for urgent OPEC meet on lower oil price: Kuwait

Posted on 12 September 2014

OPEC member Kuwait said on Thursday there was no need to call an emergency meeting for the producers` cartel to discuss sliding oil prices after crude hit a 17-month low. “We do not believe there is a need to call an emergency OPEC meeting” to discuss the drop in prices, Oil Minister Ali al-Omair told reporters at the end of a regular meeting of the oil ministers of the Gulf Cooperation Council (GCC).

Saudi oil minister plays down drop in oil price

Posted on 12 September 2014

Saudi Oil Minister Ali Al Naimi on Thursday played down the drop in oil prices saying this is not the first time crude prices slumped. “Prices of oil always go up and down so I really don’t know why the big fuss about it this time,” Al Naimi told reporters ahead of a regular meeting for oil ministers of the Gulf Cooperation Council (GCC) states in Kuwait City.

Saudi Arabia can cope with $85 Oil and create global demand

Posted on 12 September 2014

Traditionally, lowering prices of Crude oil lead to a supply response from major OPEC producer, Saudi Arabia. However, this time around, it hasn’t done so but raised production since June.

Sub-$100 Oil Is Just A Price, Not A Signpost

Posted on 12 September 2014

The fall in Brent prices below $100 for the first time in months is, to some, a startling development, especially given the insistence in some quarters that $150 is the next ‘target’ as economic recovery increases demand and shale oil production shows signs of weakness.

Increase in Iran oil storage to increase export flexibility

Posted on 12 September 2014

A substantial increase in Iranian oil storage capacity will give the sanctions-hit country more flexibility to export crude, the International Energy Agency (IEA) said on Thursday.

September is the time to buy gold, history suggests

Posted on 12 September 2014

For those who like to follow investment trends there is a new one that is growing in popularity – buying gold in September. Over the past 20 years, as the chart below shows, the gold price tends to shine in September. On average bullion has delivered returns of over 3pc, which is by far the best performing month for the precious metal.

Gold Prices To Hit $5,000 Within The Next 3 To 4 Years

Posted on 12 September 2014

In April 2010 I made a somewhat controversial prediction that gold would reach $5,000 an ounce. I still believe this to be a realistic price target – and now prominent gold mining experts are following suit. Rob McEwen is more than qualified in the realm of gold mining – he’s the founder and former chairman and chief executive officer of GoldCorp Inc.(NYSE: GG), a $20 billion Canadian gold miner and the world’s largest by market cap.

China holds “Gold Congress,” positioning itself as global gold hub

Posted on 12 September 2014

The China Gold Congress is currently in full flight in Beijing. The three day Congress is China’s biggest gold industry event of the year, drawing in participants from across the Chinese and international gold sectors including central banks, mining companies, bullion banks and refiners.

6 reasons to invest in silver

Posted on 12 September 2014

Silver has fallen massively from its highs and arguably offers investors an attractive route to hedge against future market turbulence. Below are 6 reasons to buy this precious metal: 1) The silver price has more than halved from its high of $48 in 2011.

China’s Global Mining Play Is Failing to Pan Out

Posted on 12 September 2014

A $10 billion iron-ore mine that has taken more than eight years to develop near this remote Australian port is a glaring example of how much has gone wrong with China’s decadelong push to buy up raw materials around the world.

Silver Loses Its Polish

Posted on 12 September 2014

It hasn’t been a good day for precious metals. We already reported that gold is on its way to its fourth straight day of declines thanks to a strong U.S. dollar and falling demand for a safe haven. But silver has also taken a thumping, and earlier today fell to its lowest price in 14 months. That took silver-focused ETFs along for the ride.

Commodity ETFs at Multi-Year Lows on Supply Glut

Posted on 12 September 2014

Slowing global growth has stifled demand for raw materials, pushing down commodity-related exchange traded funds to multi-year lows, with one broad commodity index trading near a five-year low. The PowerShares DB Commodity Index Tracking Fund has declined 7.5% over the past three-months and is hovering around its lowest since September 2010.

Industrial Metal ETFs To Buy Amid Weak Global Trends

Posted on 12 September 2014

Industrial metals, in particular nickel, aluminum and zinc, have been showing strength and are gaining enough investor interest despite the recent broad commodity sluggishness and strengthening dollar.

Currency Hedged ETFs Are Back In Play

Posted on 12 September 2014

The recent weakness in the euro and yen currencies, along with subsequent strength in the U.S. dollar index, has put currency hedged ETFs back in the center of investors’ radar screens. The Guggenheim CurrencyShares Euro Trust and Guggenheim CurrencyShares Japanese have fallen 3.4 percent and 4.8 percent respectively over the last month. The monetary policies set forth by central banks in Europe and Japan has been one of the key drivers for this swift dive lower.

London Metal Exchange to Launch Premium Contracts for Metals in 2015

Posted on 12 September 2014

The London Metal Exchange on Thursday said it would launch premium contracts in the second quarter of 2015, which could allow market participants to protect themselves from spikes in costs that arise on top of the cost of the metal.

India: How key commodities swing with currency movements

Posted on 12 September 2014

Though demand-supply is the prime factor influencing commodity prices, any variation in the value of currency will also have a telling effect on prices . Since India meets its demand for various products through imports, a weak rupee will escalate its landed cost and apparently, that will have an effect on retail prices as well.

Ecuador’s ‘digital currency’ explained

Posted on 12 September 2014

40% of Ecuadorian adults don’t have a bank account, but is their new ‘currency’ more about escaping the US dollar? Under a new monetary code, the Ecuadorian government in August released more information about plans for what they call a digital currency.

S.Korea increases emissions cap in proposed carbon trading scheme

Posted on 12 September 2014

A cap on carbon dioxide emissions that South Korea expects to introduce as part of a carbon trading scheme will be around 3 percent larger than previously touted over the next three years, the government said on Thursday. Seoul has been under pressure from industry worried about costs from plans to begin what will be the world’s second-biggest carbon emissions trading scheme from the start of 2015.

Carbon markets gaining momentum in the U.S.

Posted on 12 September 2014

An emerging model for reducing global pollution and promoting renewable energy is quietly gaining traction. Two of the nation’s major carbon trading markets have recently held auctions that brought in hundreds of millions of dollars, funding expected to go toward future “clean energy” projects. Last month, the California Air Resources Board announced the results of its latest cap-and-trade allowance auction.

Global Food prices continue to delcine on good weather, harvests

Posted on 12 September 2014

FAO’s monthly food price index registered another drop in August, continuing a 5-month downward run and reaching its lowest level since September 2010. The index’s August average of 196.6 points represents a decrease of 7.3 points (3.6 percent) from July. With the exception of meat, prices for all of the commodities measured by the index dipped markedly.

Commodities send worrying signal

Posted on 11 September 2014

Bulls of growth-focused assets may care to consider some signals from the commodity sector. Early on Wednesday, Brent crude dropped below $99 a barrel for the first time since May 2013; Tokyo-traded rubber prices hit a five-year trough; China-based steel rebar futures for January delivery hit a contract low; and, before recovering into the close, the Dalian Commodity Exchange’s January iron ore price also fell to a record low.

Emerging market buying power for commodities has actually improved

Posted on 11 September 2014

Since commodities are priced in U.S. dollars and a stronger greenback equates to a loss of purchasing power by commodity buyers, investors have been wise to avoid commodity cyclicals when the U.S. dollar is rising. But Canaccord Genuity portfolio strategist Martin Roberge points out that this approach fails to recognize that emerging markets have become the dominant buyers of commodities in recent years, as opposed to developed markets in the past.

U.S. CFTC to allow commodity hedge funds to advertise to public

Posted on 11 September 2014

U.S. derivatives regulators are removing a legal hurdle, which will open the door for hedge funds and other private funds to reach new investors through television, the Internet and other media channels. The Commodity Futures Trading Commission announced the move late on Tuesday in a staff “exemptive” letter to the industry.

Saudi Arabia slashes oil output to defend $100 price

Posted on 11 September 2014

World’s biggest exporter of oil reacts to slide in prices by trimming 400,000 barrels per day of output in August. Saudi Arabia, the world’s biggest oil exporter, has slashed its production of crude in an apparent attempt to prevent the price falling further below $100 per barrel.

OPEC Splits on Response to Falling Oil Prices

Posted on 11 September 2014

A split in response to falling oil prices emerged among members of the Organization of the Petroleum Exporting Countries after Saudi Arabia cut its oil production sharply last month while other leading members raised their output.

OPEC says world will need less of its oil next year

Posted on 11 September 2014

OPEC said demand for its crude oil will be lower than expected next year, with a surge in US output potentially bringing its production to levels not seen since the past decade.

3 Reasons the Gold/Silver Ratio “Will Fall” as 2014 Ends

Posted on 11 September 2014

The gold/silver ratio is set to fall as 2015 draws near, according to data consultancy and analysts Metals Focus, with silver outperforming gold prices for 3 reasons. Tracked by some analysts and traders to see which metal is performing better, the ratio simply divides the price of gold by the price of silver. If it rises, then gold has become more expensive in terms of silver.

Gold may be a ‘buy’ as investors turn ever more bearish

Posted on 11 September 2014

Gold is finally getting close to a bottom in prices. That is the surprising conclusion of contrarian analysis, which for months now has stubbornly refused to turn positive on gold — even as the yellow metal has suffered a death by a thousand cuts. Just this week, for example, bullion hit a fresh three-month low — among indications that gold’s recent decline has violated some key technical levels.

Will gold fall to $1200/oz? A matter of time, says IIFL

Posted on 11 September 2014

With festive season just around the corner, for most of us investing in gold is like a ritual, which has to be followed at any cost. But a wait to dig into the precious metal could prove to be more rewarding as global and local factors cast shadow on gold’s prospects to shine bright this year. Research firm IIFL foresees global gold price falling to USD 1,200/oz in a matter of time.

Four Ways To Trade Silver Near Support

Posted on 11 September 2014

With silver trading near a major support level, here are four ways to trade it using ETFs and stocks. The iShares Silver Trust (SLV) is currently trading near support level of a large descending triangle that has been in place since July 2013. The longer-term trend is down, so it’s quite possible the $17.75 to $18 support region will eventually give way to the downtrend.

Palladium Problems Could Spell Trouble for Precious Metals ETFs

Posted on 11 September 2014

With the recent weakness in gold and silver exchange traded funds, year-to-date returns for precious metals ETFs are turning increasingly mediocre. For example, the SPDR Gold Shares enters Wednesday with year-to-date performances of up 2.3% for GLD and down 5% for the iShares Silver Trust. The ETFS Physical Platinum Shares has not been anything to write home about, either, with a loss of 1.5%.

Copper outlook not supportive of price rebound: VTB Capital

Posted on 11 September 2014

The outlook for copper is “not convincing” enough to sustain a price rebound, with London Metal Exchange open interest waning, VTB Capital analyst Andrey Kryuchenkov said Wednesday. “This week saw heavy losses for copper, with the red metal erasing early September gains in a single stroke and tumbling towards support at August lows,” Kryuchenkov said in a research note.

China to export more steel

Posted on 11 September 2014

“The mills in China have been consistently overproducing. The major reason for this is the strong profitability of the industry – the price of both the ingredients (iron ore, coal, freight, fluxes etc.) and the finished steel has decreased, but the costs of producing a ton of steel fell more, so the profit margins have actually improved.

Is There a Warren Buffett ETF?

Posted on 11 September 2014

It’s a question ETF analysts are used to. The short answer is that no exchange-traded fund can replicate Buffett’s investing brilliance. For access to that, investors can buy Berkshire Hathaway B shares (BRK/B), which have gained 16 percent this year. Berkshire’s stock portfolio accounts for a minor portion of its earnings, though, and Buffett has two portfolio managers doing some of the stock picking now.

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